Chancellor John Healey delivered his first major speech, calling for a restoration of "confidence about Britain" while acknowledging the challenge of "historic high" borrowing costs. In an interview with the BBC, Healey emphasized that prioritizing growth in various regions will be central ahead of his first Budget scheduled for 28 October. He noted that "times are tough" following the announcement of 4,000 jobs at Jaguar Land Rover (JLR) and did not rule out potential tax increases due to rising government borrowing costs impacting public finances.
Healey stated his goal is to "balance the books" and "control public spending" while aiming to instill confidence in the future of the UK. He mentioned that the government is responding to "extreme pressures in the wider market" and expressed a desire to reduce welfare costs. In his speech at the Manufacturing Technology Centre (MTC) in Coventry, he outlined his mission to make the UK a hub for growth, emphasizing devolution, public leadership, investment, innovation, and job creation.
He indicated alignment with Prime Minister Andy Burnham on the need for fiscal discipline and maintaining a buffer against uncertainties highlighted by the JLR decision. Healey presented an optimistic view of the UK economy, citing recent improvements in consumer and business confidence and asserting that the economy is resilient and ready to embrace new technologies.
With seven weeks until the Budget, Healey reiterated Labour's manifesto pledge to avoid tax increases on working individuals. He refrained from commenting on specific tax or spending decisions, emphasizing the importance of controlling government spending. Conservative Shadow Chancellor Andrew Griffith criticized Healey for not ruling out tax increases, suggesting he mirrors the previous Chancellor Rachel Reeves.
Healey described the UK as "turning the corner" and advocated for greater devolution to promote equitable economic growth. However, rising borrowing costs and the need to fund increased defense spending have added pressure to public finances. Healey attributed high borrowing costs to global events and the impact of 14 years of Conservative governance, including austerity measures and Brexit.
He stated that he and Burnham aim to balance day-to-day spending with tax receipts while allowing for flexibility in response to economic shocks. Helen Miller from the Institute for Fiscal Studies expressed skepticism about achieving economic growth in every region. During Prime Minister's Questions, Burnham faced questions regarding the rising borrowing costs, with Conservative leader Kemi Badenoch pressing for solutions to the UK's increasing debt.
Rupert Harrison from Pimco noted that the UK has lost credibility with bond markets due to recent fiscal management issues. In his speech, Healey announced a £150 million fund aimed at supporting innovative companies in northern England, part of a broader strategy to foster economic growth across the UK. The fund will provide investments ranging from £5 million to £15 million to promising firms, including university spin-outs. Liberal Democrat deputy leader Daisy Cooper criticized the fund as insufficient to drive significant growth, while Reform UK's Robert Jenrick described Healey's approach as lacking direction in the wake of market instability.