Andy Burnham had a front-row seat in the Cabinet in 2007 when Gordon Brown let speculation he would call a snap election run for weeks, only to later rule one out.
As a result, the then prime minister, who had taken over from Tony Blair midway through Labour’s third term, was branded “Bottler Brown” and never recovered politically, eventually losing the next scheduled election in 2010.
Burnham, by contrast, has repeatedly and definitely ruled out an early poll since taking over in No 10 in July.
But some believe the Prime Minister may simply be trying to avoid the fate of his old boss – he has to shut down talk of an election until he has decided to call one.
Burnham and Healey: ‘Santa’ and ‘Scrooge’ at Budget
The increasing chatter in Westminster about the prospect of a snap general election in spring is fuelled by suggestions of a low-key Budget that will not deliver the funds needed to support the Prime Minister’s agenda for change.
Turmoil on global bond markets, partly driven by the Iran war, is threatening to impose a spending straitjacket on Chancellor John Healey, who already has to find £4.7bn to fill a black hole in the defence investment plan.
Burnham and Healey have been likened by some in Labour to “Santa” and “Scrooge”, while the Chancellor is understood to be having regular tough conversations with Cabinet ministers about what is affordable, amid claims departments are being told there will be little extra cash to spend.
Despite better than expected growth figures on Friday, Healey is expected to have to raise taxes to balance the books in next month’s Budget, and then face fresh questions over how he will use next year’s spending review to fund a plan for defence spending to hit 3 per cent of GDP in 2030.
Politically he has no option but to do this, having resigned as Sir Keir Starmer’s defence secretary over the issue – a move that helped hasten Starmer’s exit from Downing Street.
The sense that the fiscal walls are closing in was fuelled further on Friday, after youth unemployment tsar Alan Milburn warned that his recommendations for welfare reforms would not save enough money fast enough to avoid tricky decisions on tax and spending.
At the same time, Burnham’s ally Jim O’Neill, who has been informally advising him on economics, has gone public with warnings not to raise taxes in the Budget. Instead. Lord O’Neill called on the Government to scrap the state pension triple lock, which Labour pledged in its manifesto to maintain.
‘He will have to raise taxes’
Questions are being raised about how Burnham can afford to meet big pledges on fixing social care and enacting the biggest council housebuilding programme since the Second World War.
With Reform UK reeling from donations scandals and the Conservatives failing to fully capitalise, it is all fuelling speculation that Burnham may yet call a snap poll.
A senior Whitehall figure said all the signs were that the Prime Minister was weighing up a May election, when he could seek to win his own mandate with a manifesto that would release him from the tax lock imposed by Starmer that prevents rises in income tax, national insurance and VAT, or any increases in tax on “working people”.
“If he is serious about solving the social care crisis before the end of this Parliament, there is no way he will be able to do it within the constraints of the existing manifesto,” the source said.
“He will have to raise taxes if he is to deliver that scale of change, and the public simply won’t wear him breaking the current manifesto when he has not been elected by either the people of this country or even members of his own party.”
A Labour ex-Cabinet minister said they “think May next year is most likely, before the spending review”, but they warned Burnham would not be able to go into any election promising tax rises, and instead might have to seek a mandate for welfare or other spending cuts.
“When was the last time Labour won an election promising to put taxes up? Harold Wilson in 1974, and it didn’t happen, the wealth tax didn’t happen,” they added.
However, one former minister suggested Labour would have more room for manoeuvre on tax because the last election had led to parties of all colours being “dishonest” with the public about the scale of the economic challenge facing the country.
‘It’s a chicken and egg scenario’
The source said there could not be another election where parties seek to promise the impossible to win votes, suggesting the party may be able to drop Starmer’s tax lock.
Another Labour insider said they believed Burnham would gamble on a spring election, although he would be likely to require a bigger bounce in the polls than he currently enjoys.
“That’s why they have got to be so careful with the Budget,” the source said. “Any wrong step and he could end up being less popular afterwards, which would make him less likely to call an election. It’s a bit of a chicken and egg scenario at the minute.”
Many Labour MPs would be likely to baulk at the prospect of an early general election, with polls still predicting a huge loss of seats for the party if an election were held tomorrow.
However, some are more sanguine and recognise the need to strike while Reform and the Green Party no longer appear to be in the ascendancy and the Tory recovery process remains moribund.
One senior Labour figure even suggested that the Prime Minister might be better off with a smaller majority than the current working majority of 166: “For purposes of party unity and discipline the optimum would probably be a majority of 30-40 MPs.”
The ex-Cabinet minister also suggested it might be a good time to take on Reform, as Nigel Farage was no longer passing the “pint test” – the leader voters would most like to go to the pub with – after being engulfed by donation scandals in recent months.
“People instinctively know that if someone gives you £5m they want something,” the MP alleged, referring to the undeclared “gift” of that sum to Farage by the crypto-billionaire Christopher Harborne.
That is now subject to an investigation by the Parliamentary watchdog. Both Farage and Harborne deny wrongdoing.
‘Budget will be a nothingburger’
The MP warned that the Chancellor was in a “very difficult” position going into the Budget because “a point-something percentage change on the gilt markets wipes out your headroom” – the buffer the Government has against its spending plans.
They suggested he is likely to be warning Burnham that many of his ambitions are undeliverable within the fiscal constraints: “That’s often the way it goes – the PM is Santa and the chancellor is Scrooge, it’s a familiar dynamic.”
A senior Conservative source said they thought the Budget was going to be a “nothingburger” with little money to play with.
They said Kemi Badenoch and her colleagues were increasingly of the view that Burnham would play it safe on 28 October, and then call an election next year in a bid to get his own mandate.
UK opinion polls since 2024 general election. Infographic from PA GraphicsThe source also pointed out that the spending plans left by Rachel Reeves were very tight in the final year of the Parliament, meaning that Burnham would be tempted to call an early election in 2027 rather than let it run its course and then have to make spending cuts or increase taxes just before a national contest in 2029.
The i Paper understands Burnham and Healey have been working together closely on the Budget, and that there have been discussions about what is realistically affordable.
The Prime Minister is said to be fully aware of the state of the public finances after entering No 10, more so than during the Makerfield by-election, when many of his big pledges were made.
The Chancellor and Emma Reynolds, the Chief Secretary to the Treasury, are also understood to be having regular difficult conversations with Cabinet ministers about what is affordable, amid claims that departments are being told there will be little extra money to spend.
Others are more optimistic that Healey and Burnham will be able to find cash.
Cash is there, Dale Vince claims
Labour donor and Ecotricity founder Dale Vince told The i Paper that up to £25bn could be saved from net-zero budgets on carbon capture and heat pumps, with more than half available to help fund defence spending at 3 per cent of GDP by 2030, which would cost around an additional £17.3bn a year according to official forecasts.
“The current net-zero budget provides plenty of opportunity to save money and repurpose for defence,” Vince said.
“For example, the £22bn earmarked for carbon capture (£10bn in this Parliament) – a technology that does not work anywhere in the world and likely never will – and the £3bn of subsidies for heat pumps – subsidies for well-off families to buy exotic technology that puts their heating bills up. Neither can move the dial on our carbon commitments in any meaningful way or provide economic growth.
“By cancelling both, the Government could free up around £13bn just during this Parliament – for defence spending.”
One MP said the upcoming Milburn review of youth unemployment would be “radical”, although they questioned whether the final outcome of the report, and the separate Timms review, would “allow us to reform PIP [personal independence payment] and UC [universal credit] with sufficient vigour so as to arrest the [welfare] bill’s continuous climb”.
But they added that “spending pressures” relating to areas such as defence, and “a gentler, more collaborative style” from Burnham, Healey and Work and Pensions Secretary Pat McFadden, meant there was a “six-to-nine-month window” to push through reform.
Despite political realities closing in on the Prime Minister, he is still enjoying something of a honeymoon, earning rave reviews for his appearance before Labour MPs at a Monday meeting of the parliamentary party, with one saying: “You don’t realise how shit Keir was until you see it done well”.
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