Both Andy Burnham and his Chancellor have hinted at tough choices for the Government this autumn, despite the Prime Minister’s intent to push forward a message of hope at his first Labour conference since seizing power.

Mr Burnham acknowledged he and the Chancellor John Healey face a “challenging” set of circumstances at the Budget, and said he is prepared to take tough decisions to deliver his change agenda.

Elsewhere, Mr Healey signalled he was willing to make the case to Labour backbenchers over welfare reforms, as there was a “moral duty” to ensure a generation of young people get into work.

Their room for manoeuvre at the Budget has been severely constrained by rising borrowing costs, pushed up by the US-Iran war, among other global events.

Speaking to the Guardian, Mr Burnham insisted his Government could both bring forward a radical reform agenda, and maintain the public finances amid the fraught economic situation.

He suggested the public would have “more respect for us if we go and grab something difficult … and say, ‘right, we’re going to do something here’, rather than constantly playing the political game before fixing the problems”.

He added: “It’s challenging, definitely, but there are still things that you can do. Always in politics, there are things that you can do. The question is sometimes, are you prepared to do them? Yeah, I am prepared to do them.”

Speaking to the Sunday Times, Mr Healey meanwhile suggested he was ready to argue his case with Labour backbenchers opposed to welfare reform, as a means of containing the ballooning costs to the public purse.

He told the newspaper: “I first got elected nearly 30 years ago for part of Rotherham and in the 1990s, in South Yorkshire, the level of youth unemployment was one in three.

“That, for me, is a moral duty that this Government now must pick up again, with nearly a million youngsters post-Covid, before the election, not in employment, not in education, not in training.

“I refuse to see a generation in jeopardy. I refuse to see a generation condemned to a life on benefits.”

The Chancellor also suggested that he could raise capital gains tax at the October 28 Budget, something his Cabinet colleagues Louise Haigh and Wes Streeting called for over the summer.

He described the levy as the lowest of “any European G7 nation”, leaving open the possibility it could be hiked and still remain lower than Britain’s neighbours.

In what could be the latest step to help households with the cost-of-living crisis, Mr Healey also suggested to the Sunday Times he was mulling over whether a planned fuel duty rise should go ahead.

“I’m conscious of these pressures and I will take them into account when I make my Budget decisions,” he said discussing the tax.

Elsewhere, the Prime Minister offered a further glimpse of his determination to overhaul the social care system.

He told the Sunday Mirror that the death of his father Roy last week – who required care because of his Alzheimer’s – had fuelled his determination to deal with social care’s problems.

“I won’t leave office without having grasped this nettle,” he said.

Mr Burnham added: “It is a priority for me, and I will face it. And it may make me unpopular, but I’m going to do it.”

Labour’s conference in Liverpool begins on Sunday, with the party’s deputy leader Lucy Powell expected to give a speech to members.

The Prime Minister will make his speech, aimed at outlining his broad agenda for Government, on Tuesday.