UK budget: John Healey pledges fiscal discipline

UK Finance Minister John Healey pledged on September 7 to keep strict fiscal discipline at the centre of the Labour government's October 28 budget, while also saying Britain’s weak growth needed to change.

In his first keynote speech since becoming chancellor of the exchequer in July, Healey said “fiscal discipline” was his “first priority”. He said he and Prime Minister Andy Burnham were “in lockstep” on meeting the government’s fiscal rules at the budget.

Healey did not say whether taxes would need to rise to help reduce Britain’s debt. He has previously committed to rules set by his predecessor Rachel Reeves, including that day-to-day public spending should be covered by tax receipts.

The speech in Coventry came as governments face higher borrowing costs. Rising inflation has helped push UK government bond yields to their highest levels in decades, while consumers and borrowers are expected to face interest-rate rises from central banks.

Healey also said tackling high youth unemployment was a “moral duty” and said the country’s growth path had to improve. “This is essential. It is possible. It is central to my purpose as chancellor,” he said.

Alongside the speech, the British government said it planned to cut red tape and create a £150-million fund to support business innovation in northern England, in line with Burnham’s aim of shifting more economic and political power outside London.

During the speech, Jaguar Land Rover announced plans to cut 4,000 jobs over the next two years, with most expected in the West Midlands region where Healey was speaking.

Burnham, who replaced Keir Starmer over the summer, appointed Healey to the Treasury post after taking office in July. Since then, the government has announced cheaper bus fares, a tax cut on electricity bills and relief for pubs and other hospitality venues.

High public debt and borrowing costs leave the government with limited room for larger commitments, including greater public control of utilities, ending rough sleeping and filling a defence spending gap.