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UK PM and chancellor urge ministers to keep within spending limits
The joint letter comes as a war in Iran lifts inflation and borrowing costs, with Healey’s first Budget scheduled for 28 October.
UK Prime Minister Andy Burnham and Chancellor John Healey have sent a joint letter to cabinet ministers requiring them to stick to the government’s existing spending limits while funding new pledges, the BBC reports.
Burnham, who has announced cost-of-living measures including scrapping VAT on domestic electricity bills, reduced business rates for pubs, and capping bus fares in England, said the government will continue to follow Labour’s fiscal rules on spending and borrowing, and will not raise income tax, VAT, or national insurance contributions.
Healey said his first Budget, due on 28 October, will be built on fiscal discipline and intended to meet the “fiscal rules” set by previous leaders Sir Keir Starmer and Rachel Reeves.
The BBC notes that persistent inflation tied to the Iran war could have eroded the £22 billion buffer left in Reeves’ last budget, and a think tank has warned the prime minister has a limited margin, potentially requiring spending cuts or tax rises to fund priorities including defence and social care.