Key facts
- Burnham's first budget will focus on incremental changes, not a radical economic overhaul.
- Cuts to business regulation and targeted cost-of-living help are expected.
- Significant tax regime changes are unlikely in the upcoming budget.
- The budget is seen as a stepping stone to a 10-year plan and a 2027 spending review.
- Measures to address energy bills and 'sludge' of business bureaucracy are anticipated.
Prime Minister Andy Burnham's upcoming budget is expected to be more about managing expectations than delivering radical change, according to officials and analysts. While Chancellor John Healey is set to announce measures like cuts to business regulation and targeted cost-of-living support, significant overhauls of tax regimes are not anticipated. This approach is seen as a strategic move to avoid spooking markets and to lay the groundwork for Burnham's longer-term "10-year plan" and a spending review slated for 2027.
Sources suggest the budget aims to be a "stepping stone," focusing on reducing bureaucracy and providing immediate relief on energy bills, such as potentially scrapping standing charges. The government acknowledges the difficulty of the current economic climate, citing ongoing wars in Iran and Ukraine and high inflation, and argues that ambitious reforms are not yet ready. Opposition parties are preparing to criticize the budget as a "deferral budget," accusing the administration of avoiding hard decisions.
Despite the cautious approach, government officials emphasize the budget's ambition within the current political context. Discussions are underway regarding fiscal devolution to regional mayors and potential measures to boost Britain's heavy industries, including finding nearly £5 billion for a defense investment plan. The focus on "energy" is expected to be a key theme, encompassing both cost-of-living support and infrastructure resilience.