Burnham budget comments come as the prime minister pushes back against claims that investors see his government as a traditional tax-and-spend administration.
Former Bank of England chief economist Andy Haldane made the criticism during an interview with LBC. Haldane, who has previously advised Burnham on economic policy, said financial markets had become more doubtful about the government’s approach to public spending.
He argued that investors wanted evidence that Burnham was willing to make politically difficult spending cuts.
Haldane said markets had moved from cautious optimism to what he described as scepticism. He also questioned whether the government would risk angering Labour MPs by reducing public expenditure.
Prime Minister Promises Difficult Choices
Burnham rejected that assessment during a visit on Wednesday.
He said his government had already made difficult decisions since taking office. Those decisions included changing spending priorities and putting the digital ID programme on hold.
“We are not that,” Burnham said when asked about Haldane’s description of the government.
He added that ministers would continue to make difficult choices to keep the economy on track.
Burnham also said the next Budget would be challenging. He pointed to economic pressures linked to the situation in the Middle East and said the government would consider those pressures when making its decisions.
October Budget Faces Pressure
The government faces growing pressure ahead of the Budget on 28 October.
Higher borrowing costs have reduced the room available to ministers under the government’s fiscal rules. At the same time, Burnham has maintained Labour’s election commitments not to increase the main rates of income tax, VAT or National Insurance.
That leaves the government with fewer options for raising additional revenue.
Haldane has argued that ministers face a difficult choice between increasing taxes and reducing spending. He has urged Burnham to demonstrate greater control over government expenditure.
However, Burnham says his priority is to protect living standards while maintaining economic stability.
Inflation Adds to Government Challenge
The Budget pressure comes as inflation remains a concern.
Burnham said efforts to reduce household costs would need to continue. He also acknowledged that recent price increases had created additional difficulties for families.
Meanwhile, unions are calling for further measures to help households with energy bills. TUC general secretary Paul Nowak has backed proposals for the government to consider higher taxes on banks to help fund support for lower-income families.
The government has yet to set out the full details of its October Budget.
Spending Decisions Under Scrutiny
Since entering office, Burnham has committed around £1.8bn to measures aimed at easing the cost of living. Some of that money will come from changing priorities within existing departmental budgets.
The government has also promised additional defence funding. However, ministers have delayed a decision on when defence spending should reach 3% of GDP until next year.
As a result, the coming weeks will be important for the government’s economic plans.
Haldane’s comments have added to the debate over whether ministers should raise taxes, reduce spending or find savings elsewhere. Burnham, meanwhile, insists he is prepared to make difficult decisions while protecting the wider economy.
The October Budget will show how the government balances those competing pressures.
