Burnham’s ‘personal minute’ on Brexit reveals far more than Healey’s budget hour

The prime minister’s questions session immediately before the budget is usually irrelevant, a pointless political amuse bouche before the economic main meal. Yesterday’s clash between Andy Burnham and Kemi Badenoch highlighted just how many of the major reforms and big decisions facing the government were being kicked down the road. On Europe, social care, the North Sea, welfare reform, water privatisation, Ukraine, Donald Trump and cyber-security, the prime minister’s answers were more important for the long-term future of the country than the chancellor’s statement.

As if to prove the point, Burnham opened the cabinet meeting that preceded the budget by telling his ministers that he would be writing to them about the UK’s relationship with the EU. The Brexit deal struck by the previous government had led to low growth and made it harder to control immigration, he said. In a “personal minute” subsequently circulated to all cabinet members, under the heading “Official – Sensitive”, Burnham stressed that a closer UK-EU relationship was “crucial to our security and prosperity”.

The government “must be prepared to look honestly at the evidence and act in the UK’s national interest”, he insisted. Cabinet collective responsibility would apply and it would “not be appropriate for ministers individually to advocate for specific options or opine on the likely outcome of the process”. It was only after he had spoken his mind on Europe that the prime minister handed over to the chancellor to tell the cabinet what was in the budget.

There was nothing on Brexit in John Healey’s statement. And in his BBC interview this morning the chancellor batted away questions about whether a closer relationship with the EU would be the crucial factor in driving economic growth as part of a “bigger national conversation that the prime minister wants to encourage” rather than a matter for him. The budget was a deliberately low-key affair. Healey’s understandable aim was to “do no harm” at a time when global markets are twitchy.

There were 98 measures contained in the 150 pages of the Treasury Red book, more than in either of Rachel Reeves’s budgets, but nothing that matched the prime minister’s rhetoric about ending 40 years of neoliberalism. The £100 “household energy payment”, the removal of standing charges from gas bills and the axing of import taxes on gherkins and baked beans will give a little “breathing space”, as the chancellor put it. The handouts were funded by tax rises for villains – bankers, landlords and gamblers.

But this was a “picky bits” budget rather than a transformative plan. That was a choice. The OBR report published alongside the Treasury documents showed the terrifying unpredictability of the public finances. If energy prices reach a higher and more sustained peak, borrowing could be £17bn above the central forecast in 2027-28. A 1% change in interest rates could raise or reduce government debt interest costs by £16bn. A new war in Iran launched by a petulant US president after next week’s midterm elections would blow up all the forecasts and plans.

The chancellor was determined to avoid any economic hostages to fortune. The trickiest dilemmas were shelved. Alan Milburn’s review on youth unemployment was supposed to report on 15 October. At the last minute it was delayed until after Healey’s statement because the Treasury did not want to have to account for the short-term costs of the plan. Reform of disability benefits awaits Stephen Timms’s review. A new social care system depends on Louise Casey’s report.

The promised increase in defence spending will not happen until after the spending review. And the future of the Rosebank oilfield in the North Sea will be based on semi-judicial decision by the energy secretary, Miatta Fahnbulleh, although the prime minister hinted at his own views yesterday when he told MPs that “use of our reserves can support and accelerate a clean energy future”. The budget was just the first step on a road that includes the EU summit, the prime minister’s 10-year plan, a set of policy reports and the spending review.

The chancellor and the prime minister traditionally operate as a duopoly in Whitehall, for better or worse. Sometimes the tension between No 10 and No 11 is so acute that the government becomes completely dysfunctional. When the relationship works there is a healthy creative tension that improves policymaking. But Burnham is such a dominant figure that this is a unipolar administration. His personal position is reinforced by the structural reforms at the centre, including the creation of a department for the prime minister to balance the power of the Treasury.

One minister says that Burnham is his own “outrider” on Europe – it is the prime minister who is pressing Whitehall to go further, faster and take nothing off the table, including going all the way and rejoining the EU. His conference speech was toned down to ensure that the remarks on Brexit were carefully calibrated, but within hours the Labour leader had gone much further in media interviews. “This is all coming from him,” one government source says.

The prime minister’s chief of staff, James Purnell – who grew up in France and as a child spoke better French than English – is the only other senior figure who is as committed to the pro-European cause. It is the same across so many areas of policy. Related articles: Healey did nothing to scare the markets. Sadly, he didn’t do much else either Why John Healey’s budget is good for London – and its trains The problem is there will be no ducking the difficult decisions in the end.

Labour won the last general election on a one-word slogan – change. Keir Starmer was booted out of Downing Street because he failed to deliver it. Burnham replaced him because he promised to be a more radical alternative. This budget was a “safety-first” holding position, but if the prime minister wants to deliver the change the voters crave, he will soon need to show more ambition. Nerd’s corner As a proud girly swot, I spend some time each week looking at a policy issue.

This week, a Royal tax quandary. The sad story of the Bradninch tenants being evicted from their farms and houses in Devon by the Prince of Wales that I wrote about on Sunday only highlights the absurdity of Royal taxation. The Duchy of Cornwall does not pay capital gains tax because any money made from selling the assets has to be reinvested in the business. It does not pay corporation tax because it is “not a corporation”. The heir to the throne’s income generator is Schroedinger’s tax entity that somehow simultaneously exists and does not exist.

The Prince of Wales does pay income tax but only on a “voluntary” basis – he paid £7.76m in 2024/5 although the Duchy’s “distributable surplus” that year was £23.6m which implies some pretty hefty expenses. There is, though, an even more glaring inconsistency. As the tax expert Dan Neidle points out , income tax, capital gains tax and inheritance tax are all imposed by statutes that do not bind the Crown. This explains why the Sovereign is exempt but it does not apply to the heir to the throne.

The rationale for the Prince of Wales not paying tax like an ordinary person is in fact, Neidle says, a three paragraph opinion issued by law officers in 1913 which itself suggests that such “awkward and difficult questions” raised by it are best not put to the test. It is, according to the tax expert, a “very thin” document which might have “passed muster in an age of greater deference but to modern eyes it’s not an opinion at all – just an assertion with no reasoning.”

Even at the time it was published it seems not to have convinced people because the Duchy of Cornwall kept paying income tax until 1921. Bizarrely nobody has raised this in Parliament for 113 years. Perhaps if an inquisitive MP asked about it they might shame HM Revenue and Customs into looking at the anomaly again. Neidle’s expert opinion is that the Prince of Wales should be paying “real, normal, statutory tax” on his income from the Duchy of Cornwall.

The Duchy should also, he thinks, pay capital gains tax on the sale of the assets. He is convinced that if HMRC sent a tax bill to Kensington Palace then the Prince would be legally obliged to pay it. That would certainly concentrate Royal minds and make a small contribution to the chancellor’s black hole. Culture check Antony Gormley’s Angel of the North near the A1 in Gateshead must be the most “on brand” work of art for Andy Burnham’s Government.

It is seen by an estimated 33 million people a year so it is one of the most viewed and the chancellor announced in his budget that next spring’s international investment would be held in Gateshead so it will be centre stage then too. But my favourite Gormley sculpture is in Margate. The solitary cast iron figure, called Another Time , comes and goes with the sea. At low tide it stands exposed on Fulsam Rock off the coast by the Turner Contemporary gallery and then the waves lap around it until at high tide it is completely submerged.

There is something eerily majestic about it. And the transformation of Margate from deprived coastal town into a cultural magnet known as ‘Shoreditch-on-Sea’ is proof of the economic power of the arts. Photograph by Lauren Hurley/No 10 Downing Street Politics Andy Burnham Budget