UK's Healey tells ministers to prepare for budget cuts, The Times reports

British finance minister John Healey has instructed cabinet ministers to make budget cuts to fund new spending commitments, citing a lack of new money for key initiatives.

British finance minister John Healey has told cabinet ​ministers to make cuts in their ​budgets to help fund the government's ‌new ​spending commitments under Prime Minister Andy Burnham, the Times reported on Friday, citing an interview with Healey. Healey will hold his first ‌budget on October 28 and has pledged to stick to the borrowing rules he inherited from his predecessor Rachel Reeves.

Healey and Burnham, who moved into Downing Street less than two weeks ‌ago, have written to every cabinet minister telling them that there was no new ‌money available for plans to expand technical education, devolve power to regional governments and help ease cost-of-living pressures, the newspaper said. In the joint letter, Healey said that "all new announcements must be funded from within existing budgets."

"If ⁠we are ​serious about our ⁠new government's priorities, we must also be serious about reprioritisation," he wrote, adding: "Each department has a responsibility to ⁠manage within its budget, to control borrowing and help get inflation down." Healey said Britain's "inexorably rising welfare ​bill must be controlled," and did not rule out tax rises in the ⁠budget, the report added.

Economists say the government has little room for error in meeting its fiscal targets, while Burnham's ⁠priorities, including ​higher defence spending and better social care, could add pressure to public finances. Healey said he could not yet commit to the defence spending goal but signalled it would ⁠be central to next year's spending review, the Times added.

"At the spending review, we will ⁠set out a ⁠clear path to meeting our 3.5% NATO commitment in 2035 and we will set a target date on that path for 3%," Healey ‌told the ‌Times.