Healey refuses to rule out tax rises before Spending Review

Chancellor John Healey has not ruled out the possibility of further tax increases before the upcoming Spending Review. During a hearing before MPs on the Treasury Committee, Healey expressed that he would announce the schedule for fiscal events in 2027 "in due course". This statement has raised concerns about the likelihood of additional tax hikes before the Spending Review. Healey warned that government department heads would also need to search for cuts to fund Prime Minister Boris Johnson's long-term plans.

The Spending Review is expected to be shaped by the 10-year plan devised by Andy Burnham and is set to be delivered by December 17. Healey emphasized that the task of raising defence spending and implementing plans for increased public control in the face of weak public finances would require a joint effort between himself, Burnham, and the first secretary of state, Louise Haigh.

Following questions from the Liberal Democrats' chief secretary to the Treasury, Bobby Dean, Healey refused to confirm that new tax rises would not be announced before the major fiscal event. He stated that the decisions regarding tax would be made during the course of next year, and he would announce the timing and method for the Spending Review at a later stage.

Economists have warned that current government spending projections assume significant cuts of tens of billions of pounds from "unprotected" departments like education and justice after 2030. The Office for Budget Responsibility predicts that the Chancellor will need to top up budgets to avoid a 2.6% decrease in real terms for day-to-day spending starting from 2029.

Furthermore, the National Institute of Economic and Social Research has suggested that Healey may face a £30bn fiscal deficit if he aims to fully fund defense and social care plans while maintaining annual departmental spending growth.