Burnham pledges to tackle ‘cost of business’ as firms fear Budget tax raid
Andy Burnham has pledged to help tackle the “cost of business” as he looks to head off fears that the private sector will be hit with another punishing tax raid at the Budget.
Burnham said he wants to “make life easier” for people and businesses as he prepares for his first Budget under the new government.
In an interview on Wednesday, the Prime Minister said the fiscal problems facing the government were “challenging” but he was taking steps to ease the pressure on both households and the private sector.
“I’m not coming into this role thinking how do we make life harder? I’m trying to make life easier for people. How do I take pressure off? How do I meaningfully deal with the cost of living and the cost of business?,” he told the Financial Times.
The Budget on 28 October was the “earliest date we realistically could have done”, according to Burnham.
He also tried to ease worries among investors and business owners that a series of tax hikes were coming at the Budget. The Prime Minister said he was “acutely conscious of how hard the operating environment is for businesses, big and small”.
“People shouldn’t read into me giving that answer that all kinds of things are coming,” he added.
His comments reflect growing concerns from the private sector that the government could again lean on the private sector at the Budget in order to raise revenue. Research by the British Chambers of Commerce, one of the country’s largest industry groups, suggests that government policies over the last decade have pushed up costs on businesses by about 70 per cent.
Burnham says trade with EU can add to growth
The Prime Minister also appeared to signal that a trade summit with the European Union was set to take place in November, having previously been scheduled for July before Sir Keir Starmer resigned and left Number 10.
He echoed his predecessor in suggesting that boosting trade with the economic bloc would “add percentage points” to the UK growth rate.
Starmer previously argued that boosting trade with the EU would be central to delivering growth.
Burnham’s approach suggests that the UK might yet plough ahead in lowering trade barriers on various industries. In its 2024 election manifesto, Labour said the UK would not seek to re-join the customs union or single market and described such a move as one of its “red lines”.
But Burnham said relations with the EU were an issue that “we cannot ignore”.
The new Prime Minister also told the Financial Times that his focus on boosting “public control” over utilities such as water and energy were partially a way to show he did not “necessarily” back full nationalisation.
“It’s about making the basics function properly and function properly for business, so you create the most benign investment environment for companies,” he said.
The comments come just under a week before Parliament returns, setting the government up for a two-month run-in to the Budget.
Several City economists have estimated that the size of the fiscal headroom is at around £15bn due to the hit from rising energy prices. However, a left-leaning think tank, the Resolution Foundation, calculate the headroom to be closer to £8bn.
Rising energy costs have intensified calls from North Sea energy companies to be given permits to drill for more oil and gas. Decisions on new licences at the Jackdaw and Rosebank oil and gas fields are expected within days.
Burnham added that he backed comments made by the Labour donor Dale Vince, the green-energy tycoon who has long criticised fossil fuel usage, suggesting that drilling in the North Sea could “make sense” if some further price controls are introduced.