Conservatives: A fair Budget would take tough decisions on spending and welfare to fund defence and cut taxes to promote growth

• Labour's third budget promises more of the same: higher taxes and no action on welfare.
• The Chancellor is kicking the can down the road rather than facing up to the tough decisions.
• The Budget should set out a plausible plan for how Government lives within its means, how taxes can be cut to promote growth and help with the cost of living and how Labour will meet our 3% GDP defence commitment. The Conservatives are the only party with a plan to do all three.

John Healey must cut spending, including welfare spending, to fund tax cuts to promote growth and jobs, the Conservatives have said today [Wednesday 28th October], in a final appeal to the Chancellor to put fairness at the heart of the Budget.

Healey is set to shy away from any truly significant changes today and deliver a Budget intended to do no harm'. But in doing so, he will neglect the urgency of the issues facing Britain.

Labour look set once again to bottle the big decisions, making this the third tax-raising Budget from Labour that hurts businesses and working people and fails to tackle the ballooning welfare bill.

Nor will a do-nothing Budget make people feel safe. Healey resigned as Defence Secretary because of Labour's failure to spend 3% of GDP on defence. Now he is Chancellor, yet he is kicking the can down the road just like Rachel Reeves did, with no funding plan expected until later next year.

And Labour have now been accused of concealing the truth about defence spending by including intelligence spending within the overall figures to inflate the headline numbers.

When the Chancellor delivers his Budget today, the tests must be:

• Is it fair?
• Does it make me better off?
• Does it make Britain secure?

Sadly, there is little reason to be optimistic the Chancellor will meet these tests.

Labour's fiscal rules are based on a public-spending squeeze which their own MPs will not swallow.

The contrast with the Conservatives is clear. We are the only party that will back hard work and fix the national finances.

We have set out £36 billion of savings from the welfare bill alongside schemes to get people back into work.

We have pledged more than £10 billion of extra spending on defence to ensure we hit the 3% target.

And we will cut taxes to help with the cost of living and get our economy moving.

Richard Fuller MP, Shadow Chief Secretary to the Treasury, said:

Britain's public finances are on a cliff edge. A do-nothing' Budget will not solve the problems staring us in the face: a spiraling welfare bill, a crippling tax burden, mounting debt and rising global threats.

When we see the Budget, we must ask: is it fair to take more and more money from hard-pressed working families just to spend it on more benefits? Will more tax hikes and more borrowing make us better off? And is it right to leave our Armed Forces under-resourced?

Labour are running scared of the big decisions necessary to get our country back on track. Burnham must not bottle it. The Conservatives are the only party with a coherent plan to back hard work, cut spending, cut taxes and get Britain working again.

ENDS

Notes to Editors:

Andy Burnham has repeatedly said that his will be a cost of living government, yet he has done nothing to ease the burden of tax hikes imposed by his own Party.  The Joseph Rowntree Foundation warns this could be the worst Parliament on record for living standards with families set to be hundreds of pounds worse off every year. Measures to tackle Labour's cost of living crisis are welcome but taking 40p off the cost of the weekly shop with discounts on boiled sweets is an insult to families hammered by two years of Labour tax rises.

Labour are squeezing families and businesses for every penny they can get:

• Labour have increased the tax burden by £66 billion, or £2,275 per household, taking the tax burden to a historic high. At Autumn Budget 2024, Rachel Reeves increased taxes by £40 billion before increasing them by £26 billion at her second Budget. With 29 million households in the UK, this is equivalent to £2,275 per household (The Labour Party, Change, 13 June 2024, link; OBR, Economic and Fiscal Outlook, 26 November 2025, link; ONS, Families and households in the UK: 2025, 17 April 2026, link). 
• The tax burden is set to reach a historic high of 38.5 per cent of GDP, eroding hardworking people's payslips and punishing businesses. Labour's first two Budgets have increased taxes by £36 billion and £26 billion respectively, pushing the tax burden to a historic high of 38.5 per cent of GDP (OBR, Economic and Fiscal Outlook, 3 March 2026, link). 
• Over the Parliament, Labour are already taxing £240 billion more than the plan they inherited. From 2024-25 to 2028-29, National Accounts Taxes are now forecast to be £238.2 billion higher than forecast in March 2024 (OBR, Economic and Fiscal Outlook, 3 March 2026, link; OBR, Economic and Fiscal Outlook, 6 March 2024, link). 

Higher inflation under Labour is hammering working people:

• Prices have increased by 7.3 per cent under Labour. The Office for National Statistics CPI index was 133.8 for July 2024 and 143.6 for August 2026. This is an increase of 7.3 per cent (ONS, CPI Index All Items, 16 September 2026, link).
• Forecasts collated by HM Treasury show that inflation (CPI) is expected to rise further. HMT's forecasts for the UK economy, which collated 16 independent forecasts received in September 2026, show that CPI inflation is expected to average 3.4 per cent in the final quarter of 2026, up from 3.1 per cent in August 2026 (HMT, Forecasts for the UK economy: a comparison of independent forecasts, 15 September 2026, link).
• Household essentials have increased by hundreds of pounds under Labour:
• • The Food and Drink Federation (FDF) has warned that fod inflation is set to reach 4 per cent by Christmas and peak at 6.4 per cent in July 2027. The FDF has also warned that food inflation is forecast to remain significantly above historical averages for the second half of 2027. Karen Betts, CEO of the FDF, said: The persistently higher costs of energy, logistics and packaging, compounded by this summer's extreme heat, mean that food prices will rise this year, and we believe that rise will be sustained into 2027' (FDF, Press Release, 9 September 2026, link).
  • The energy price cap has increased by £367 under Labour. The energy price cap for July to September 2024 was £1,568. That has increased to £1,935 for October to December 2026 on a like-for-like consumption basis, or £1,723 on Ofgem's current typical-use measure (Ofgem, Energy Price Cap, 27 May 2026,link; Ofgem, Press release, 26 August 2026, link).
  • The price of diesel has hit a record high, and petrol is at its highest since 2022. DESNZ statistics show that for 12 October 2026, the pump price of petrol was 175.28 pence per litre. This is the highest since August 2022, during the energy crisis triggered by Russia's invasion of Ukraine. For diesel, the pump price was 200.04 pence per litre. This is the highest ever recorded (DESNZ, Weekly road fuel prices, 20 October 2026, link).

Labour are presiding over a spiralling welfare bill:

• Spending on working-age benefits is forecast to be £170.1 billion by the end of the Parliament £32 billion higher. Welfare spending on working-age benefits (as measured by the share of social security within the Welfare Cap) in 2024-25 was £137.6 billion; it is forecast to increase to £170.1 billion by 2028-29, the end of the Parliament (DWP, Benefit expenditure and caseload tables 2026: Outturn and forecast tables: Spring Forecast 2026, 14 April 2026, link). 
• Inflation will push up the benefits bill by £5.5 billion next year. Analysis by the Institute for Fiscal Studies found that total welfare spending would rise by about £5.5 billion in 2027, which is £2.2 billion more than the Treasury has budgeted for (The Daily Telegraph, 21 October 2026, link).

Labour are maxing out the nation's credit card:

• The deficit for this year hit £77.3 billion in August - £8.1 billion above the forecast. (ONS, Public sector finances, 22 September 2026, link; The Guardian, UK borrows £18bn in August, putting pressure on Healey before budget, 22 September 2026, link).
• Public sector net borrowing exceeded £18 billion in August. This was almost £3 billion higher than August last year, and £3.5 billion above the OBR's forecast. (ONS, Public sector finances, 22 September 2026, link; The Guardian, UK borrows £18bn in August, putting pressure on Healey before budget, 22 September 2026, link).

Labour are failing to fund defence:

• John Healey resigned as Defence Secretary because Labour's refusal to fund defence would make Britain less safe'. In a damning resignation letter, Healey laid out that Keir Starmer was unwilling to give the MoD what is required for defence and the country at this dangerous time'. He specifically said that without a DIP that meets the moment in this way, I am being forced to make decisions that would reduce the readiness of our Forces and increase the risk to personnel on operations, and could make the country less safe'(X, John Healey, 11 June 2026, link). 
• John Healey said in his resignation speech that Britain must spend the headmark of 3 per cent on defence in 2030'. HEALEY: Britain must set the headmark of spending 3 per cent on defence in 2030 and a clear path to 3.5 per cent in 2035the commitment all NATO nations have made to each other and to their people' (Hansard, Personal Statements, 16 June 2026, Vol 787 Col 731, link). 
• John Healey said that, because of the looming threat of Russian attack, the Government needs to take harder choices' instead of incremental change'. HEALEY: NATO has now said that we must prepare for war with Russia within the next five years. This is the age of hard power and rising threat. This is not the moment for calibration or incremental change. This means bigger politics, bolder priorities and harder choices' (Hansard, Personal Statements, 16 June 2026, Vol 787 Col 730, link). 
• The Government's own Defence Investment Plan would leave a £10 billion a year gap against the 3 per cent target by 2030. The DIP committed the Government to spending just 2.7 per cent of UK GDP by 2029/30 on defence an uplift of £10 billion a year against the Government's current plans is needed to meet the 3 per cent target that year (The Defence Investment Plan Funding Explainer, MoD, 30 June 2026, link; Quarterly National Accounts, HMT, 30 June 2026, link).  
• The Daily Telegraph reported that the British Army's armed vehicle programme budget was having to make £2 billion worth of cuts. The Daily Telegraph reported that the overall armed vehicle programme budget has now been cut from more than £7 billion to just over £5 billion as a result of funding removal following Army re-prioritisation', meaning that crucial armoured vehicle capability is being sacrificed to save money (The Daily Telegraph, 19 October 2026,link).