John Healey has told the Labour conference that the money available to the party in the 1990s is simply not there now, delivering a blunt message about the UK's economic reality. The Chancellor also announced a £300m investment by Rolls-Royce in its aerospace factories, including the plant at Glasgow Airport.
Nostalgia meets fiscal reality
Speaking at the 2026 Labour conference in Liverpool, Healey paid tribute to Gordon Brown, recalling how he lent the then Chancellor his red tie before Brown's 1999 conference speech. Healey said he had not worn the tie since, until today.
But the new Chancellor quickly moved from nostalgia to a stark warning. "The money New Labour had in the '90s is simply not there now," he told the conference, a moment that briefly sucked the air out of the room. Economic growth was double in 1999 what it is now, and Healey spelled out that the UK Government now spends more on servicing its debt than the entire budget of the Home Office and MOD combined.
Growth as the only answer
It was a clear indicator that the fiscal statement due to be delivered will not be littered with give-aways. "The only answer," Healey told the room, "is growth".
Andy Burnham has worked hard to strike a positive and upbeat tone since he entered No 10. But the Prime Minister must successfully navigate through the same choppy economic waters, or risk his entire project being capsized. Voters have responded well to the PM's sunny optimism after two years of doom and gloom from Keir Starmer and Rachel Reeves, but they are unlikely to tolerate further tax rises or cuts in public spending. Savings will have to come from somewhere, with welfare one possible option.
Defence spending and Scottish jobs
Healey talked about wanting to get more young people off benefits into work. As he put it: "It's is not progressive to allow a bigger and bigger benefits bill, and a system which offers an income but doesn’t offer a future."
It wasn't all bad news. The Chancellor announced Rolls-Royce is investing £300m in its existing aerospace factories, including the plant at Glasgow Airport. There was also confirmation that new giant floating dry docks intended for Faslane naval base will be built in the UK, which will almost certainly mean work for Scottish yards. The Record first reported in May the real fears among trade unions the contract could be sent overseas.
Defence is one of the few areas, including the NHS, the UK Government has to be seen to be spending more money on. Other departments are unlikely to favour so well in Healey's all-important first Budget.
