{"id":218482,"date":"2026-09-07T12:47:13","date_gmt":"2026-09-07T12:47:13","guid":{"rendered":"https:\/\/www.europesays.com\/people\/218482\/"},"modified":"2026-09-07T12:47:13","modified_gmt":"2026-09-07T12:47:13","slug":"andy-burnhams-economic-optimism-is-already-unraveling","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/people\/218482\/","title":{"rendered":"Andy Burnham\u2019s economic optimism is already unraveling"},"content":{"rendered":"

In a speech<\/a> this morning, Chancellor John Healey acknowledged that achieving growth won\u2019t be easy, insisting that fiscal discipline is his main priority. He has warned that the next Budget \u2014 his first in the job \u2014 will be a \u201ctough one\u201d, blaming the Iran war for stoking inflation and damaging the public finances. Rumors swirl that more tax rises are on the way, even as Prime Minister Andy Burnham has committed to the Labour manifesto pledge of no increases to VAT, income tax, or national insurance, as well as refusing to raise corporation tax.<\/p>\n

The irony would be delicious if it were not so tragic. Burnham offered himself as an optimistic antidote to the dour economic expectation management of the Keir Starmer-Rachel Reeves era. Yet just six weeks into his premiership, his chancellor is warning of difficult times to come.<\/p>\n

Any prime minister would be in a similar bind, but Burnham\u2019s own personality will make Healey\u2019s job much more difficult than it has to be. His opponents have already seized on his apparent inability to say no: at his first Prime Minister\u2019s Questions, Tory leader Kemi Badenoch branded<\/a> him a \u201cspendthrift prime minister who wants to say yes to everyone\u201d.<\/p>\n

The first clear example of this came in the Makerfield by-election campaign over the issue of the Waspi women<\/a>, who claim to have suffered financial hardship due to allegedly inadequate Government notice regarding the increase in their state pension age. Addressing their concerns could have cost up to \u00a310 billion, according<\/a> to the Health Service Ombudsman. Burnham told a hustings he would stick by his previous pledge to the Waspi women, whom he thought deserved \u201crecompense for the unfairness\u201d. Within 24 hours, as attention turned to the potential price tag, he swiftly ruled out compensation.<\/p>\n

This bump has not slowed down the Prime Minister\u2019s spending commitments. A report last month by Capital Economics<\/a> warned that these promises \u2014 including social care and welfare reform, and meeting defense spending targets \u2014 could top \u00a340 billion. This would necessitate tax rises of \u00a320-25 billion, bringing the tax burden to a new high of 39% of GDP. Burnham\u2019s desire to please everyone therefore has serious fiscal consequences.<\/p>\n

Healey, then, will have to play bad cop and make sure the UK sticks to the Reeves-era fiscal rules. This will inevitably result in saying no to some of Burnham\u2019s pledges. The PM will struggle to get spending cuts on welfare past his backbenchers, while there is limited public appetite for tax rises.<\/p>\n

The risk is that this good cop-bad cop routine will erode the optimism on which Burnham built his pitch for the premiership, mirroring Starmer and Reeves\u2019s missteps. This is exactly the trap that consumed his predecessor, who entered Downing Street promising change only to spend his first months preparing voters for pain. Burnham\u2019s appeal rests on rejecting that miserabilism; Healey risks importing it straight back into government.<\/p>\n

However, the Chancellor has already had his fingers burnt in this regard. Having resigned<\/a> from Starmer\u2019s government in June over the Labour leader\u2019s failure to commit to 3% of GDP on defense by 2030 and set out a path to 3.5% by 2035, Healey then drew much ire in his new role last month when he also wavered<\/a> on 3% by 2030. The man who resigned because Starmer wouldn\u2019t spend enough on defense is now telling Burnham that the Treasury cannot afford that same former demand.<\/p>\n

By deliberately fencing himself off from the broad-based taxes capable of raising large sums cleanly, Burnham has left his chancellor with politically ugly alternatives. He can abandon some of his spending promises, break the manifesto tax lock, or seek a mandate of his own. The PM has explicitly ruled out an early election, but fiscal reality may force his biggest U-turn yet.<\/p>\n","protected":false},"excerpt":{"rendered":"In a speech this morning, Chancellor John Healey acknowledged that achieving growth won\u2019t be easy, insisting that fiscal…\n","protected":false},"author":2,"featured_media":218483,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[126],"tags":[28914,8414,10745,264,387,1049,10922,3202],"class_list":["post-218482","post","type-post","status-publish","format-standard","has-post-thumbnail","category-keir-starmer","tag-andy-burnham","tag-defence-spending","tag-john-healey","tag-keir-starmer","tag-labour-party","tag-taxes","tag-uk-economy","tag-uncategorized"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@people\/117229836274174271","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/218482","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/comments?post=218482"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/218482\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media\/218483"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media?parent=218482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/categories?post=218482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/tags?post=218482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}