Key facts
- U.K. Chancellor John Healey stated that the government lacks the financial flexibility of the previous Labour administration under Tony Blair.
- Healey vowed to support British businesses to create wealth and growth.
- Healey's first budget is scheduled for October 28.
- Analysts estimate the chancellor has between £8.5 billion and £12 billion in fiscal headroom.
- Healey committed to meeting fiscal rules and reducing long-term financial pressures.
- Healey plans to stick to Labour's manifesto commitment not to raise taxes on working people.
U.K. Chancellor John Healey acknowledged on September 28, 2026, that the current government does not possess the same financial resources as the Labour administration led by Tony Blair in the late 1990s and early 2000s. Speaking at the Labour Party Conference in Liverpool, Healey stated that while he is committed to backing British businesses to foster economic growth and create wealth, the public finances are significantly more constrained.
Healey, who is set to deliver his first budget in exactly one month, warned against expecting a spending spree similar to the Blair era. He emphasized that London should not be solely responsible for the country's economic growth and pledged to ensure that any wealth generated is shared across Britain. Analysts estimate that Healey has between £8.5 billion and £12 billion in fiscal headroom, leaving limited funds for political objectives.
Addressing concerns from businesses about potential tax increases, Healey asserted that fiscal discipline and support for British firms are central to his plans for "growth in every postcode." He stated that he and Prime Minister Andy Burnham are aligned in their commitment to meeting the government's fiscal rules and reducing long-term financial pressures. Healey argued that stronger economic growth is the most sustainable path to balancing the public finances, but also signaled that his budget would necessitate honesty about controlling government spending.
Economists have cautioned that Healey might be compelled to raise taxes or implement spending cuts due to rising pressures and the economic impact of the war in Iran, which has caused turmoil in global bond markets. Healey also commented on the lingering negative effects of former Prime Minister Liz Truss's mini-budget on the U.K. government bond market. He reiterated his intention to adhere to Labour's manifesto promise of not increasing taxes on working individuals.
Business groups welcomed Healey's pro-growth message and his commitments to devolve tax and spending powers. However, Conservative shadow chancellor Andrew Griffith criticized the speech for lacking detail and continuing the policies of Rachel Reeves, while Reform UK's Robert Jenrick described it as "dire and dreary."