Andy Burnham Warns Against Excessive Tax Hikes Before Budget

Prime Minister Andy Burnham warned that the UK government must get the balance of taxation right ahead of Chancellor John Healey's first Budget on October 28. Burnham acknowledged that there is limited room for major tax increases after the national tax burden reached a record high during the first two years of the Labour government.

The fiscal position has deteriorated due to economic fallout from the war in Iran, which has driven up inflation and government borrowing costs. These pressures have reduced the headroom available under the spending and debt rules inherited from former chancellor Rachel Reeves. Tax receipts are forecast to rise to 38.5% of GDP by 2030/31, marking the highest level since 1948.

While Labour donor Dale Vince has urged the government to increase capital gains tax to ease the burden on income tax, Burnham emphasized the need to be mindful of the revenue already raised in 2024 and 2025.