{"id":716616,"date":"2026-07-29T04:10:09","date_gmt":"2026-07-29T04:10:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/716616\/"},"modified":"2026-07-29T04:10:09","modified_gmt":"2026-07-29T04:10:09","slug":"burnham-has-no-scope-to-increase-borrowing-think-tank-warns","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/716616\/","title":{"rendered":"Burnham has no scope to increase borrowing, think tank warns"},"content":{"rendered":"

Prime Minister Andy Burnham will have to raise taxes or cut spending to meet his pledges on defence and the cost of living, a major think tank has said.<\/p>\n

Burnham has announced a series of new measures since assuming office last week, including cuts to electricity bills<\/a> and bringing the bus fare cap in most parts of England back down to \u00a32<\/a>.<\/p>\n

But the National Institute of Economic and Social Research (Niesr) warned the public finances will continue to be squeezed by more persistent inflation as a result of the Iran war.<\/p>\n

It questioned whether Burnham had “fully thought through” how his promises would be paid for, but said the prime minister will have to raise taxes or cut spending elsewhere.<\/p>\n

Stephen Millard, Niesr’s deputy director for macroeconomics, said: “There’s clearly no scope for increasing borrowing, so it is about choices.”<\/p>\n

Labour’s manifesto pledge was to not increase taxes for working people – including income tax, VAT and national insurance contributions<\/a> – which Burnham has said he will uphold.<\/p>\n

Millard said Niesr was advocating for cost-of-living measures to be funded through higher taxes \u2013 “which could involve tax reform rather than higher marginal rates” \u2013 or spending cuts.<\/p>\n

He said: “People have talked a lot about the welfare bill \u2013 that is an obvious place to look.<\/p>\n

“The triple lock on pensions, that is very, very expensive, and will get more expensive as we age.”<\/p>\n

He also pointed to potentially reforming council tax to move towards a land value tax system, or scrapping some VAT exemptions.<\/p>\n

“Once you’ve done all of that, then I’m afraid I would break the manifesto promise and would be looking at the income tax rate.”<\/p>\n

Niesr also said on Wednesday it expects inflation to keep rising until February 2027, peaking at 3.8% before falling back to the Bank of England’s 2% target.<\/p>\n

The think tank said in its latest economic outlook that it does not believe the central bank will cut interest rates until 2028.<\/p>\n

Its Director David Aikman said that “treading water is not enough” to prevent the national debt from rising.<\/p>\n

“Every major shock this century has ratcheted the debt ratio higher, and none of that increase has been reversed,” he said.<\/p>\n

The Treasury said the government will stick to its fiscal rules while investing in “the public services people rely on”.<\/p>\n

“Fiscal discipline is the bedrock of economic stability and national security,” a spokesperson said.<\/p>\n","protected":false},"excerpt":{"rendered":"Prime Minister Andy Burnham will have to raise taxes or cut spending to meet his pledges on defence…\n","protected":false},"author":2,"featured_media":716617,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[59,57,58,50,56,54,55],"class_list":["post-716616","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-kingdom","tag-gb","tag-great-britain","tag-greatbritain","tag-news","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/716616","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=716616"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/716616\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/716617"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=716616"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=716616"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=716616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}