Burnham says first budget fell short of radical ambitions

Prime Minister Andy Burnham told ITV that the first budget presented by Chancellor John Healey did not provide the level of fiscal flexibility he had hoped for. He said the "room for manoeuvre wasn’t what I would have hoped it to be" and noted that delivering a truly radical budget is difficult in the current volatile economic climate.

Burnham, who entered No 10 in July with a pledge to reverse decades of neoliberal policy, faced criticism from allies and backbench MPs who described the budget as "undistinguished" and lacking bold tax-and-spend measures. While the plan included a one-off £100 payment for households in council tax bands A to D to help with rising energy costs, it omitted major cuts to welfare spending despite forecasts of a near-30% rise in benefits outlays by 2032.

Defence Secretary Wes Streeting said Labour must reduce the welfare bill gradually to avoid internal revolt, supporting Healey’s decision not to set a specific timetable for cuts. Streeting warned that arbitrary targets for welfare reductions have previously led to backlash and policy failure.

The budget also featured a £4.3 billion tax raid on savers and landlords but was characterised by observers as a "steady-as-she-goes" package. Burnham indicated that a more radical approach would involve demanding repayments from banks for past assistance, describing a proposed payment to 20 million households as a significant step.

Looking ahead, the government plans to introduce a welfare reform bill next year, drawing on recommendations from Alan Milburn’s upcoming review of back-to-work programmes. Burnham has ruled out "crude cuts" to welfare, emphasizing a sustainable and responsible approach to reform.