Chancellor John Healey has refused to rule out tax increases in next month’s Budget after acknowledging government borrowing costs are at “historic highs”.
In an interview with the BBC, Healey said he wants people to feel “confident about Britain and our future”.
But he said “times are tough”, with Jaguar Land Rover (JLR) on Monday announcing 4,000 planned job cuts, mostly in the UK.
And he refused to comment on any decisions about tax ahead of his first Budget on 28 October, promising only to “balance the books” and “control public spending”.
Asked about the impact of higher borrowing costs, which have surged in the last few days, the Chancellor said that the government was responding to “extreme pressures in the wider market,” and reiterated that he wanted to “bring down welfare costs.”
Earlier, in his first major speech as chancellor, Healey said his mission was to “make Great Britain growth Britain” again.
Speaking at the Manufacturing Technology Centre (MTC) in Coventry, he said,
“My defining mission as chancellor is growth, good growth in every postcode. And I’ve set out today the way this government will set about it: more devolution, more public leadership and control, more investment, more innovation, more jobs.”
Healey said he is in “lockstep” with Prime Minister Andy Burnham about the need for fiscal discipline and having a buffer in the government’s spending plans “against the sort of uncertainty that the JLR decision locally has shown”.
It came as Healey offered an upbeat view of the state of the UK economy ahead of the Budget, building on a recent uptick in consumer and business confidence.
Speaking in Coventry, he set out a “new story” of the economy not just turning a corner but being resilient, optimistic and “ready to seize the opportunities of new technologies and ideas”.
With seven weeks until the Budget, Healey said the government will stick to Labour’s manifesto pledge, made under Sir Keir Starmer and former Chancellor Rachel Reeves, to not “increase taxes on working people”.
He repeatedly refused to comment on possible tax rises or spending cuts ahead of 28 October, stating only: “Staying true to our values means being honest about the need to control government spending.”
Conservative Shadow Chancellor Andrew Griffith, said: “Healey failed to end uncertainty by ruling out more tax rises.”
He added that Healey “sounds increasingly like continuity Rachel Reeves”.
In his speech from the Manufacturing Technology Centre in the Midlands, Healey described the UK as “turning the corner” and said greater devolution would spread economic growth more evenly across the UK.
But recent ructions in government debt markets have piled fresh pressure on already-stretched public finances, with the Treasury needing to fill possible multi-billion pound gaps caused by rising borrowing costs and the need to fund higher defence spending.
