Burnham warns of ‘challenging’ Budget and hits back at ‘socialists with TikTok’ jibe
Andy Burnham has warned Brits to expect a “challenging” Budget as he hit back at his former adviser for accusing him of being a “socialist with better TikToks”.
Burnham’s comments will be interpreted as an indication that tax hikes will likely form part of October’s Budget, as his pledge to give households “breathing space” on the cost of living comes under pressure.
He told reporters on Wednesday that the Budget “is going to be challenging because the picture around the world is challenging and the situation in the Middle East.
“We won’t take risks with people’s living standards or the economy as a whole. It will mean taking whatever action we can to help people.”
Despite pledging to shake up the UK’s economy with a devolution blitz and stronger public control over “essential services,” Burnham’s economic programme has been cast into doubt just weeks away from the Budget by soaring borrowing costs.
The yield on the UK’s 10-year gilt hit its highest level since 2007, touching 5.41 per cent on Tuesday. Borrowing costs on 30-year gilts rose to a daily high of 5.93 per cent.
The government has sought to blame surging gilt yields on a global sell-off caused by investor fears that rising oil and gas prices will force central banks to hike interest rates.
But the surge in borrowing costs has thrown Burnham’s Budget into doubt, as he and Chancellor John Healey will be forced to find as much as £9bn to restore the Treasury’s fiscal headroom even before funding any of the new PM’s more eye-catching policies.
Burnham: ‘Difficult decisions to come’
In a major warning ahead of the Budget, former Bank of England chief economist Andy Haldane said that Burnham is presiding over a “traditional tax and spend socialist government with better TikTok videos”.
Haldane, who had been an informal adviser to Burnham but refused to take a formal role in his government, said the “Achilles heel” of the new administration is its failure to cut public spending.
Burnham hit back at the claims on Wednesday, saying that his former adviser’s remarks do “not tell the story, we are not that”.
“Already I’ve taken difficult decisions in this job to reprioritising gov spending, putting digital ID on hold for instance. It’s not that we won’t take difficult decisions, we will take difficult decisions to make sure the economy remains on track,” he said.
Lord Jim O’Neill, another former adviser to the Prime Minister who refused an official role, has said that Burnham is refusing to pull the levers available to him which would calm the bond markets.
The Prime Minister must try to rein in the “excesses” of government spending by abolishing the triple lock on the state pension and overseeing significant cuts to welfare spending, the former Goldman Sachs economist said.
In the latest warning to Burnham and Healey ahead of the Budget, the Office for National Statistics (ONS) revealed on Wednesday that inflation surged to a five-month high of 3.1 per cent last month.