Burnham’s Budget bind

When Burnham took office in July, there followed a summer of optimism about a brighter future for Britain – with a government putting concern about the cost of living front and centre, with a raft of policies to give “breathing space” to struggling families.

However, as the rains of autumn swept in, the optimism of August has been slightly dulled as we approach the Budget. The economic situation would be tough for any Prime Minister, but it has certainly worsened due to the ongoing war in the Middle East, which threatens to spike fuel prices ahead of the winter.

After inflation ticked up yesterday, Burnham warned of “difficult decisions” in the Budget and said: “It is going to be challenging, because the picture around the world is challenging.” The warnings to some will seem to echo those of Keir Starmer – and could worry some that Burnham’s government could end up being a ‘Starmerite’ administration with better marketing, due to events outside his control.

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There is little good economic news for the Prime Minister; UK borrowing costs are the highest in decades, diesel prices are heading towards £2 a litre in some parts of the country, and he remains committed to Labour’s manifesto pledges on tax.

However, Burnham’s core goal of offering “breathing space” remains unchanged – so the hope of a nation will be that the burden of those tough decisions will fall on those who have the means to pay more. Similarly, efforts to end the NEETs crisis could help reverse the long-term expansion of the welfare bill, and Britain could have access to cheaper credit to raise defence spending if it opts to join the global defence bank.

There are levers, however limited, available for the Prime Minister to navigate the choppy economic waters while continuing to offer hope for those who have been struggling for far too long. The question in six weeks’ time will be how much of his optimistic vision for Britain will end up on the cutting room floor?

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