Since Andy Burnham became prime minister, Labour’s mood has improved: it is edging up in the polls, and party figures praise a more effective Downing Street operation. But next month’s Budget and pressure on public finances loom over that optimism.
Chancellor John Healey is preparing next month’s Budget amid intense pressure on public finances, including rising debt-interest costs, welfare spending and demands for more defence spending. A senior figure framed the choice as £10bn in cuts or £10bn in tax rises, but Treasury sources said they did not recognise that simple figure. Annual energy bills are predicted to rise by £500 early next year.
Labour also faces debate over whether it is doing enough to promote growth. Former business secretary Peter Kyle urged the government to treat economic growth with the same urgency as social reforms. Some on the left want relief for lower-paid workers, while unions are expected to call for worker tax cuts and more investment. MPs are seeking detail on Burnham’s themes of public control and re-industrialisation; housing and defence announcements were only rumoured ahead of the conference.
