{"id":722343,"date":"2026-08-01T06:55:13","date_gmt":"2026-08-01T06:55:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/722343\/"},"modified":"2026-08-01T06:55:13","modified_gmt":"2026-08-01T06:55:13","slug":"john-healey-tells-minsters-to-prepare-for-budget-cuts-to-finance-new-burnham-pledges","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/722343\/","title":{"rendered":"John Healey tells minsters to prepare for budget cuts to finance new Burnham pledges"},"content":{"rendered":"

Your support helps us to tell the story<\/p>\n

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it’s investigating the financials of Elon Musk’s pro-Trump PAC or producing our latest documentary, ‘The A Word’, which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.<\/p>\n

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.<\/p>\n

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.<\/p>\n

Your support makes all the difference.Read more<\/p>\n

Chancellor John Healey<\/a> has told cabinet<\/a> ministers they must prepare for spending cuts to finance Andy Burnham<\/a>\u2019s new policy pledges. <\/p>\n

The directive follows Mr Healey\u2019s announcement that his first Budget, set for 28 October,<\/a> will be “built on fiscal discipline”.<\/p>\n

Mr Burnham\u2019s premiership has seen a succession of costly announcements, including cost of living measures such as a cut in VAT on electricity bills<\/a> and reduced business rates<\/a> for pubs. <\/p>\n

Further plans involve radical devolution across England and an expansion of technical training in schools. <\/p>\n

Ministers have been informed, via a joint letter from the chancellor and the prime minister, that no new money is available for these initiatives.<\/p>\n

\u201cWe\u2019ve written to the cabinet to say that if we\u2019re serious about new priorities as a second-stage Labour<\/a> government we have to be serious about \u2013 and they have to be serious about \u2013 reprioritisation of their plans, their budgets,\u201d Mr Healey told The Times.<\/p>\n

\"HealeyHealey will face significant challenges as he attempts to find more money for Burnham\u2019s devolution priorities (PA)<\/p>\n

\u201cThey need to pay for the new things they want to do this year and next year within the budgets they\u2019ve already got.\u201d<\/p>\n

In the letter, he wrote that departments need to be \u201cdisciplined on spending, looking at the tough choices and being ready to shift funding away from unproductive or legacy programmes that no longer reflect this administration\u2019s priorities\u201d.<\/p>\n

Mr Healey will face significant challenges as he attempts to find more money for Mr Burnham\u2019s devolution priorities and increased defence spending amid warnings the Iran war will further squeeze the public finances.<\/p>\n

He will also have to set out how the government will fund \u00a35bn of defence spending announced in May\u2019s Defence Investment Plan (Dip) without details of how it would be paid for.<\/p>\n

He will come under pressure to increase that funding further, having resigned as defence secretary ahead of publication of the Dip, arguing it did not provide enough money for the armed forces.<\/p>\n

He would not commit to raising defence spending to 3 per cent of GDP by 2030, but suggested it could form part of next year\u2019s spending review.<\/p>\n

\u201cAt the spending review, we will set out a clear path to meeting our 3.5 per cent Nato commitment in 2035 and we will set a target date on that path for 3 per cent,\u201d he told The Times.<\/p>\n

Earlier, he said the Budget would \u201cmeet our fiscal rules\u201d and \u201cgive businesses and families some of the stability they need to plan for the future\u201d.<\/p>\n

Looking back at Mr Burnham\u2019s first two weeks as prime minister, Mr Healey said the new government was \u201cworking fast to restore hope and back Britain\u2019s communities\u201d and had \u201cbegun to kickstart growth in every postcode\u201d.<\/p>\n

Experts have warned Mr Healey that he will need to raise taxes or cut spending elsewhere<\/a> as pressure on the public finances has left no room for extra borrowing.<\/p>\n

The National Institute of Economic and Social Research (Niesr) said on Wednesday the conflict in Iran would mean more persistent inflation and higher interest rates.<\/p>\n

\"ExpertsExperts have warned that Healey will need to raise taxes or cut spending elsewhere (PA)<\/p>\n

Stephen Millard, Niesr\u2019s deputy director for macroeconomics, suggested Mr Healey should look at the welfare bill or the pensions triple lock as areas for potential cuts.<\/p>\n

He also suggested Mr Healey should consider raising income tax, which would break Labour\u2019s 2024 manifesto pledge not to raise that levy, national insurance or VAT.<\/p>\n

That pledge, along with the fiscal rules set by former chancellor Rachel Reeves on borrowing, are likely to constrain Mr Healey\u2019s room for manoeuvre.<\/p>\n

In a letter to Commons Treasury Committee chair Dame Meg Hillier, the chancellor stressed his commitment to fiscal discipline.<\/p>\n

He said: \u201cFiscal credibility is the bedrock of economic stability and national security.<\/p>\n

\u201cThat is why we will abide by the fiscal rules, ensuring we retain a buffer to protect us against uncertainty and the impact of instability in the Middle East.\u201d<\/p>\n

In her last Budget, Ms Reeves left a \u00a322bn buffer against her fiscal rules, but persistent inflation due to the Iran war could have eaten away at this.<\/p>\n

Shadow chancellor Sir Mel Stride said the announcement of the Budget date meant \u201c89 more days of unfunded spending commitments and damaging tax speculation until we get some details\u201d, and \u201c89 more days for Brits to wait before they know how much their taxes are going to go up to fund Burnham\u2019s spending addiction\u201d.<\/p>\n

He added: \u201cOnly the Conservatives have a plan to cut spending by \u00a350bn starting with the welfare bill, so we can cut taxes, lower your bills and back business to deliver a stronger economy and a stronger country.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Your support helps us to tell the story From reproductive rights to climate change to Big Tech, The…\n","protected":false},"author":2,"featured_media":722344,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[59,57,58,50,56,54,55],"class_list":["post-722343","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\/722343","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=722343"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/722343\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/722344"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=722343"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=722343"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=722343"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}