Chancellor John Healey has announced the date of his first Budget will be Wednesday, 28 October.

In a video message,  he said: “This will be a Budget that moves money and power out of Westminster, and into every postcode around Britain.

“It will be built on fiscal discipline. It will meet our fiscal rules. It’ll give businesses and families some of the stability they need to plan for the future. Now, let’s get on with the job.”

A report in the Times says Healey and Prime Minister Andy Burnham have written a joint letter to Cabinet members telling them they must stick within their existing spending limits while funding new pledges.

The Times says ministers have been told they had to live “within the budgets they have already got” even while “pay[ing] for new things they want to do this year and next”.

While the ongoing war in Iran is pushing up inflation and borrowing costs, senior Treasury sources confirmed the government is determined to stay “well within the fiscal rules” inherited from Sir Keir Starmer and his chancellor Rachel Reeves.

It comes after Burnham announced a host of new cost-of-living policies since taking office earlier this month, including scrapping of VAT from domestic electricity bills and capping bus fares in England.

But he has said his government will stick to Labour’s fiscal rules on spending and borrowing as well as the party’s 2024 manifesto pledges not to increase income tax, VAT or national insurance contributions.

Burnham also said he will honour the fiscal rules imposed by Reeves, which include a pledge to balance day-to-day spending with tax revenues by the end of the decade.

An influential think tank said earlier this week that the prime minister only has a small margin of error to do this, and that Healey may have to cut spending or raise taxes to meet Burnham’s policy priorities such as such as extra defence spending and better social care.

Healey was Defence Secretary under Keir Starmer, but resigned after a row over defence spending commitments – saying he was “certain” that Britain should lift its spending to 3% by 2030.

Questioned about funding on Thursday, Burnham’s Defence Secretary Wes Streeting repeatedly refused to commit to that target.

“Before we set out specific spending commitments, we will also set out how we pay for them at the same time,” he said.