Pressure around tax-linked cost-of-living proposals has drawn attention to John Healey, though he and Prime Minister Andy Burnham are understood to have been working to reassure the business community ahead of the Budget. Before taking office, Burnham had argued that the United Kingdom should reduce its dependence on bond markets — a position that pointed toward a more relaxed approach to managing public finances.
Since taking office, the Prime Minister has committed to maintaining the fiscal framework set by Rachel Reeves, even as turbulence in global markets places considerable strain on the incoming Chancellor.
The Institute for Public Policy Research (IPPR) has put forward a recommendation that the Government consider raising taxes as a way to ease household financial pressures. The proposal is projected to preserve the Chancellor's fiscal buffer and comply with borrowing rules, while directing extra resources toward households under financial pressure.
Three revenue-raising proposals put forward by the think tank — a restructuring of capital gains tax, a postponement of Bank of England losses tied to quantitative easing, and a new windfall charge on banks — carry a combined projected yield of roughly £20bn, according to its own modelling. A two per cent charge on online retail transactions has also been put forward, with the proceeds earmarked to ease the burden on High Street businesses through reductions in their rates bills.
IPPR has put forward a set of proposals aimed at easing financial pressure on households, calling for a ceiling on rental increases, a cap holding domestic energy bills below £2,000 throughout the opening half of 2027, and a hold on fuel duty across that same period.
The IPPR's executive director, Harry Quilter-Pinner, argued that the Budget should reduce household bills, support economic growth, and maintain a disciplined approach to public finances. The plan centres on four distinct revenue streams: a reformed capital gains tax that includes safeguards for business owners, a levy on online retailers offset by lower rates for physical shops, the removal of state subsidies covering Bank of England deficits, and a temporary surcharge applied to banking sector profits. Taken together, those measures are projected to generate approximately £16bn in revenue.
The York-based Joseph Rowntree Foundation has indicated that, without intervention, the current Parliament is on course to deliver the most modest gains in living standards seen in recent decades, alongside a call for policy that balances immediate household relief with longer-term economic improvement. A joint study by the JRF, Pro-Bono Economics, and the Fraser of Allander Institute put the drag on economic output from the cost-of-living crisis at roughly five times the projected gain that a third Heathrow runway would deliver.
The JRF's chief economist, Chris Belfield, indicated that the current parliamentary term could rank among the most damaging on record for household living standards. Those who advocate for wider economic growth contend that lasting gains across all income levels hinge on a foundation of policies that give people stability, room to plan, pathways to retrain, and the footing to pursue opportunity.
Burnham and Healey held talks with business leaders in the days running up to the Budget, according to available accounts, with the discussions centred on industry concerns. According to broadcasts from the outlet, the Prime Minister conveyed to business leaders an ambition to position the country at the forefront of commercially friendly governance globally, alongside an assurance that further tax increases would not feature in the 28 October announcement.
