John Healey moved today to reassure anxious businesses that the upcoming Budget will not simply pave the way for sweeping tax hikes, promising instead a tougher approach to controlling government spending.
In a speech designed to present Labour as an ally of enterprise, the Chancellor sought to steady nerves ahead of October’s major fiscal statement, following several days of market turbulence that pushed up the cost of government borrowing.
Echoing themes associated with his predecessor Rachel Reeves, Healey said the Budget would underline his commitment to “fiscal discipline” and stressed that bringing Britain’s debt burden under control remained a central priority.
Speaking to an audience in Coventry, he pledged to focus on making “Great Britain growth Britain again” through higher investment, greater innovation and the creation of more jobs.
The Chancellor argued that there was still an “optimistic story” to tell about the UK economy, saying the country possessed “huge latent potential” despite the pressures facing households, firms and public finances.
He described Britain as “a country turning a corner,” with people, businesses and communities ready to take advantage of emerging technologies, fresh ideas and new economic opportunities.
Yet the upbeat message was delivered amid growing concern over possible wealth taxes affecting businesses and homeowners, the threat of significant job losses and continued questions over the government’s ability to contain the benefits bill.
With UK national debt now at a 60-year high, Healey’s attempt to project himself as a steady hand came shortly after new Prime Minister Andy Burnham promised a major overhaul of the way the country is governed.
The Chancellor used a speech to pitch a private-sector-friendly version of Labour ahead of October’s financial showpiece after days of turmoil ratcheted up the cost of borrowing
In an address that had echoes of his predecessor Rachel Reeves he said the Budget would show his commitment to ‘fiscal discipline’ and highlighted the importance of getting UK debt under control.
Jaguar Land Rover has confirmed it wants to cut 4,000 jobs as part of a voluntary redundancy programme to help save £1.7billion over the next two years.
Business Secretary Jonathan Reynolds has already ruled out any government bailout for Britain’s largest car manufacturer.
At the same time Mr Healey has been told to break the pensions ‘triple lock’ to take billions of pounds from retired workers and plough it into helping cut youth unemployment.
Writing in Our News Outlet today, shadow chancellor Andrew Griffith acknowledged Mr Healey faced ‘tough choices’ but urged him to rule out further increases in Britain’s record tax burden.
He warned that the new Chancellor otherwise risks emulating his Labour namesake Denis Healey, who was forced to go cap-in-hand to the International Monetary Fund for a bailout in 1976.
Speaking after the speech, Mr Griffith said: ‘John Healey sounds increasingly like continuity Rachel Reeves.
‘Warm words about growth will not make growth a reality or cover up the enormous damage Labour have done to businesses and family finances.
The new Chancellor was warned that he risks emulating his Labour namesake Denis Healey (pictured) who was forced to ask the International Monetary Fund for a bailout in 1976
‘Healey failed to end uncertainty by ruling out more tax rises, failed to set out a serious plan to reform welfare, and failed to commit to funding defence properly – the very issue he resigned over as Defence Secretary.
‘Even as Jaguar Land Rover cuts jobs, he offered no pause to Labour’s job-destroying employment red tape and no measures to get ruinously high energy bills down.’
In his speech ahead of the first Budget since Andy Burnham entered 10 Downing Street, Mr Healey said: ‘The Prime Minister and I are in lockstep in our commitment to meeting the fiscal rules at the upcoming Budget, to balancing the books with a buffer to protect against uncertainty.
‘To controlling borrowing to bear down on inflation and reducing long-term pressures on our public finances.’
He said the rising burden of debt interest showed ‘staying true to our values means being honest about the need to control government spending’.
Giving an overview of his plans for the economy, Mr Healey said the Government would extend its reforms of judicial review from energy projects to all major infrastructure programmes.
He said the reforms would mean ‘vexatious litigation and challenge can’t block economic growth’.
The Chancellor also reiterated the Government’s commitment to transferring power out of Whitehall, saying he would set out a ‘roadmap to fiscal devolution’ at next month’s Budget.
Ahead of that, he said the British Business Bank would be providing £150 million for fast-growing firms in the North of England and announced the creation of a ‘Northern 500’ group of ‘the North’s most ambitious mid-sized businesses’, to be led by regional mayors.
