Budget on 28 October: Chancellor will not rule out triple lock change

Chancellor John Healey gave his first major speech this morning and declined to say whether taxes will go up, telling the BBC he would not and could not comment ahead of the Budget he will deliver on 28 October. Asked directly whether he was preparing the ground for significant tax rises, he paused and gave no answer either way.

The speech was made at the Manufacturing Technology Centre in Coventry, a few minutes drive from the headquarters of Jaguar Land Rover. While he was taking questions a few miles away, 4,000 office based job losses at JLR were confirmed. Healey used the timing to argue that the UK needs more resilience against global turbulence rather than to soften the news.

The sharper question for older readers was about the triple lock. Lord O'Neill, described by the BBC as one of the Prime Minister's favourite economists, has argued that the rise in borrowing rates is a golden opportunity to scrap it. Put to the Chancellor, that did not get a denial either.

"The Prime Minister has said, like I have, that we must bring down welfare costs, but we are also responding to the extreme pressure that is there in wider markets," Healey said, according to the BBC. That is not a confirmation. It is also not the reassurance pensioners have had in the past.

The triple lock guarantees that the state pension rises each year by whichever is highest out of inflation, average wage increases or 2.5 per cent. Critics say it is unaffordable. Removing it would not cut anyone's pension overnight, but it would slow the increases every year from then on, and that gap compounds.

Behind all of this sits the cost of government borrowing. Healey opened by admitting borrowing costs are too high, and UK long term borrowing costs are at their highest since 1998. The BBC's Faisal Islam wrote that the speech did not roll the pitch for big tax rises in the way the equivalent speeches did in each of the past two years, because the Chancellor is trying to protect confidence rather than drain it.

On growth, the plan leans on what he called public finance institutions, including the British Business Bank and the National Wealth Fund, which can invest without being held back by the government's own borrowing rules. He also struck a more cautious note than Downing Street on artificial intelligence, saying some degree of public control may be needed so the changes work for everyone, including on jobs.

For households, the practical position is this. Nothing is decided until 28 October, no tax rise has been ruled out, and the triple lock has not been protected in words. Anyone whose budget depends on the state pension rising with inflation should treat the next seven weeks as unsettled, and watch what is in the Budget document rather than what is said about confidence beforehand.