Economists warn that Andy Burnham’s new chancellor is lining up the next assault in Labour’s war on wealth. Reeves has already hit taxpayers twice. Now Healey is preparing a third strike. He’s set to raise taxes by another £25billion in the Budget on October 28, Capital Economics calculates. That’s on top of the £26billion Reeves hit us in 2025, and the record £40billion blitz in 2024. It’s the only way to fund all the spending pledges Burnham has been stacking up.
Our new PM only entered Number 10 three weeks ago (one of which was on holiday) but it’s been spend, spend, spend all the way. He’s capped bus fares at £2, knocked VAT off our electricity bills and cut business rates on pubs. That’s just for starters. He’s also promised to overhaul social care, hike defence spending and launch the largest council housebuilding programme since the 1950s. Someone has to pay.
Ruth Gregory, deputy chief UK economist at Capital Economics, said Burnham’s policies will cost tens of billions, piling still more pressure on the public finances. The result? “This tax-raising budget could be almost as big as the last.” Healey truly is the new Reeves.
Gregory said the upcoming Budget would increase both the tax burden, already at a record high, and the size of the UK state. She added ominously: “We suspect most of the extra burden will fall on households.”
Burnham is popular today, buttering us up with TikTok videos and blokeish quips. He won’t be so popular as the Budget looms and people realise what he has in store for them. Or rather, what’s in store for taxpayers. Pensioners, working people and entrepreneurs will be footing the bill. Benefit claimants have nothing to fear.
Backbench Labour MPs won’t let Burnham make any meaningful cuts to spending, just as they blocked Reeves’s half-hearted attempts to tackle welfare in her maiden Budget.
Gregory warned that a £25billion raid would push the tax burden to a record 39% of GDP. That’s some way higher than the G7 average of 36%. It used to be lower.
Gregory didn’t speculate on which taxes would rise, but she did say pensioners and entrepreneurs would be hardest hit. Savings, investments, property, inheritance and capital gains could all come under attack. We won’t know for sure until October 28. But we know we need to be worried.
