Andy Burnham has said he wants to get the "balance right" in the upcoming Budget for Brits squeezed by tax hikes.
The Prime Minister said he was conscious that taxes had gone up in 2024 and 2025 as previous Chancellor Rachel Reeves battled to fix the mess the Tories left of the public finances.
But the PM and his new Chancellor John Healey face a darkening economic picture ahead of a high stakes Budget next month. Government borrowing rose more than expected to £18.3bn in August, as inflation hit its highest level in five months, driven by higher fuel prices.
PM's comments on tax and borrowing
Asked if the UK had the balance right between taxing wealth and income, Mr Burnham said: "We have two budgets in 2024 and 2025 and we have to be conscious of the extent to which we have raised revenue. And we have to make sure we get the balance right." Pressed further, Mr Burnham said these were "matters for the Budget".
The squeeze on the public finances means the Chancellor faces a raft of difficult choices to balance the books - tax rises, spending cuts or more government borrowing. Mr Burnham has committed to Labour's manifesto pledge to protect working people from hikes to income tax, VAT and national insurance.
Speculation and economic outlook
This has triggered speculation he could target property, capital gains tax or business, such as the energy sector or banks.
Meanwhile, the PM rejected reports that the dire state of the economy had caught his team by surprise. He said: "It's not the case that we were surprised when we came in - not least because I was in access talks and understood very clearly the position."
"The truth of the matter is that because of the situation in the Middle East, the position changed, and has changed over the time I've been in. That's just the reality of the situation that we're in. And of course the message is that we want to see an end to the conflict as quickly as possible and we stand ready to play our part."
Bond markets warning
It came as the PM stood by his warning that Britain should be less "in hock" to the bond markets, saying high levels of borrowing has left it "over-exposed" to global shocks.
Mr Burnham made the comments last year while he was still Greater Manchester Mayor, triggering criticism from Keir Starmer's government and jitters from investors.
In an interview with The New Statesman, he said: "I mean, the point about the bond markets, it holds – in that what I was saying was the country has left itself over-exposed."
He accused Mr Starmer's team of taking his comments out of context. He said: "They couldn't understand why I was saying some of the things that I was saying… [They] didn't know what to do with it, but they did what they always do, which is they pulled one line out of it and then framed that one line within their world, rather than the one that I was talking about."
