Burnham Admits His First Budget Was Not as Radical as He Wanted

Andy Burnham has admitted that his first Budget as prime minister was less radical than the one he wanted to deliver. Speaking to ITV on Friday, he said the room for manoeuvre "wasn't what I would have hoped it to be", and that a larger energy payment had been beyond the government this week.

The interview lands two days after Chancellor John Healey set out a package built around a one-off 100 pound payment for about 20 million households, funded in large part by lifting the bank surcharge from 3 per cent to 6 per cent. Burnham called the bank measure "quite a big call", a request that lenders repay help they received "20 or so years ago". The household payment, he said, was "quite a significant step", even if he would have liked the figure to be higher. Read what Wednesday's Budget actually contained.

Why Burnham says this Budget had to be smaller

He gave two reasons. The first is the war in Iran, which has lifted oil prices and the cost of government borrowing. Healey told MPs on Wednesday that Britain could not wish those storms away. Burnham's version on Friday was blunter: "the volatility of things means you just can't necessarily deliver the budget that in an ideal world you would want to deliver." He said no prime minister and chancellor would claim otherwise. A Budget, he added, is a difficult thing by definition.

The second reason is the 2024 Labour manifesto. It ruled out rises in income tax, national insurance and VAT, and it still binds a government whose leader was not the man who wrote it. Burnham said that when the time comes he would seek his own mandate. Asked whether he would have written that manifesto as it stands, he answered no.

That line puts a gap between the prime minister and the platform that won Labour its landslide. It also tells his own side what the next argument will be about: a later Budget, under a mandate he writes himself, if the country gives him one.

What he still wants to change on welfare

Burnham said he wants a benefits system in which most young people do not have to claim at all. "I don't actually want to see anyone in their 20s on benefits," he said, "unless people can't be in work for reasons due to disability or whatever else it might be." He said the changes would avoid "brutal cuts" that leave people in "absolute crisis".

The timetable is the one Healey set on Wednesday. Alan Milburn's review of young people out of work, education or training, and Stephen Timms's review of disability benefits, are due in November. Ministers expect to answer before the end of the year, with legislation in 2027. On Thursday morning Healey told the BBC there would be a reduction in the benefits bill, done "in a Labour way". Treasury sources then said that was not a commitment to cut the bill before the next election. Friday's interview keeps the destination and withholds the date.

The critics who say the choices were ducked

Kemi Badenoch's line from the chamber is the one that has travelled. Most people listening, she said, would be thinking "is that it?". She argues the government is overspent, overborrowed and overtaxed, and that the welfare bill is the unfinished business. The Institute for Fiscal Studies said on Thursday that Healey would need about 28 billion pounds a year more to protect spending plans from inflation and to reach defence spending of 3 per cent of national income by 2030. Helen Miller, its director, said the statement carried a raft of fiddly measures and very little that would move the dial on growth.

The Resolution Foundation was harsher on the design of the help. Ruth Curtice called the Budget scattergun and said the cost-of-living money was spread too thinly to match the last energy shock. On the foundation's sums, the poorest half of households gain 158 pounds on average this year and next, and the richest half 144 pounds. The gap is 14 pounds.

Burnham's defence is that a constrained Budget can still be a serious one. He points to the bank tax, the fuel duty cut extended to July, and a business rates change he says will take 70,000 firms out of the tax. The City's first reading, set out in Thursday's market report, was calmer than the politics: the 10-year gilt yield eased to 5.308 per cent and the FTSE 100 rose. Friday's open is a different question, with investors now asking how much debt the Treasury will have to sell next.

The test Burnham set on the way into Downing Street was an end to what he called 40 years of neoliberalism. Friday is the first time he has said, in his own words, that this Budget was smaller than that test. The welfare reviews in November are the next place he will be asked to show the difference.