Labour Tensions Build Over Tax Rises Before Autumn Budget
Tensions within Labour are building over the autumn budget, with allies of the former prime minister Sir Keir Starmer warning Chancellor John Healey against raising taxes and squandering what they call a strong economic inheritance. The friction follows confirmation that the economy grew 0.4 per cent in the second quarter. The Treasury is weighing how to balance the books amid pressure on spending.
The budget is shaping up as the first major test of the Burnham government’s economic direction, and the public jockeying reveals a party still working out what it stands for after a turbulent year and a change of leader. Those around Sir Keir argue that tax rises would choke off a recovery that is real but fragile, while others contend that only higher taxes can fund public services and steady the public finances. Mr Healey must reconcile those camps while markets, wary after the soft growth figures, watch for signs of discipline. The choices — on income tax, on wealth, on spending — will define the government’s relationship with voters and business alike. Watch how the Chancellor frames the budget and whether the party rifts widen.