Headline: Burnham Rejects Claims Government Is Pursuing ‘Tax and Spend’ Economic Policy

Date: 16 September 2026

Tags: UK Politics, Economy, Budget, Labour

Summary:

• Prime Minister Andy Burnham rejected claims financial markets increasingly view his government as pursuing traditional “tax and spend” policies.

• Former Bank of England chief economist Andy Haldane said investors were questioning Burnham’s willingness to reduce public spending.

• Haldane said October’s Budget presents a choice between increasing taxes and cutting government expenditure.

• Burnham said he was prepared to make difficult decisions while ensuring the economy remained stable.

• The prime minister described the 28 October Budget as challenging, citing inflationary pressures linked to the Middle East conflict.

• Burnham highlighted previous spending reallocations used to finance cost-of-living measures and the cancellation of the digital ID rollout.

• Labour remains committed to not increasing the main rates of income tax, VAT or National Insurance.

• Higher government borrowing costs could reduce the £24 billion fiscal buffer inherited from the previous government.

• Burnham’s government has committed around £1.8 billion to cost-of-living measures since taking office.

• Trade unions are pressing the government to increase taxes on banks to help subsidise household energy bills.

Why this matters: Higher borrowing costs, inflation and existing tax commitments are restricting the government’s options ahead of October’s Budget.

What’s next: Burnham and Chancellor John Healey will have to balance spending, taxation and fiscal targets when the Budget is delivered on 28 October.