Chancellor Healey aims for growth amid high

Chancellor John Healey has called for a restoration of "confidence about Britain" while acknowledging the challenge of "historic high" borrowing costs. He made the comments in an interview ahead of his first Budget on 28 October.

Healey warned that "times are tough," referencing the announcement of 4,000 mostly UK-based job cuts at Jaguar Land Rover. He did not rule out tax increases in next month's Budget, with a recent surge in government borrowing costs piling pressure on public finances. Pressed on pre-Budget plans, he refused to comment on any tax decisions, promising only to "balance the books" and "control public spending."

Fiscal discipline and market pressures

The Chancellor said he is in "lockstep" with Prime Minister Andy Burnham on the need for fiscal discipline and maintaining a buffer in spending plans. This buffer is intended to guard against uncertainties like the JLR decision. Healey blamed the high borrowing costs on global events and 14 years of Conservative rule, citing austerity under David Cameron, Brexit under Boris Johnson, and Liz Truss's mini-Budget.

Recent volatility in debt markets has increased pressure on stretched public finances. The Treasury faces possible multi-billion pound gaps due to rising borrowing costs and higher defence spending needs. Rupert Harrison, senior adviser at bond giant Pimco, told reporters the UK was being treated as "guilty until proven innocent" regarding fiscal responsibility. He said the country had lost credibility partly due to Truss's mini-Budget, deferred deficit reduction, and persistent above-target inflation.

A mission for 'good growth'

In his first major speech as Chancellor, delivered at the Manufacturing Technology Centre in Coventry, Healey set out his defining mission. "My defining mission as chancellor is growth, good growth in every postcode," he stated. He outlined a government approach centered on more devolution, public leadership, investment, innovation, and jobs.

Healey offered an upbeat view of the UK economy, building on a recent uptick in consumer and business confidence. He described a "new story" of an economy not only turning a corner but being resilient and optimistic. The government will stick to Labour's manifesto pledge not to "increase taxes on working people," a pledge made under Sir Keir Starmer and former Chancellor Rachel Reeves.

Political reactions and a new fund

Opposition figures were critical. Conservative Shadow Chancellor Andrew Griffith said Healey "failed to end uncertainty by ruling out more tax rises" and sounded "increasingly like continuity Rachel Reeves." Liberal Democrat deputy leader Daisy Cooper dismissed a new funding announcement, saying, "Re-announcing £150m across the entire north of England will barely shift the dial on growth." Reform UK's economic spokesman, Robert Jenrick, called Healey "an empty vessel with no idea about how to rescue our economy."

During his speech, Healey unveiled a £150m fund for companies in the north of England. The fund, drawn from money already allocated to the British Business Bank, is part of a plan to spread economic growth more evenly. It will provide investments between £5m and £15m to innovative and fast-growing firms, including university spin-outs.

Helen Miller, director of the Institute for Fiscal Studies, expressed skepticism about the growth ambition. "Economic growth in every postcode sounds great and is something we would all love," she said. "I think it'll actually be much harder to achieve in practice."