Usually, the Chancellor of the Exchequer would be the star of Labour conference parties and fringe events, hobnobbing with businesses and mobbed by delegates. Not this time. John Healey is deliberately keeping a low profile, staying in his hotel room and working on his Budget, eating room service accompanied by his favourite HP Sauce.

But even Healey couldn’t avoid the Chancellor’s keynote address to delegates, laying the groundwork for difficult decisions in the upcoming Budget.

“The money New Labour had in the nineties is simply not there now,” he told the packed hall at the Labour conference, wearing a red tie he, as a young aide to former chancellor Gordon Brown, had lent his boss for his own 1999 conference speech.

Healey’s absence from the throng is partly to keep a lid on policy speculation. Treasury insiders say there was a real-world cost last year ahead of Rachel Reeves’s budget, as various policies were floated and denied, while this year’s budget on 28 October is also a month earlier than last year.

And so, his speech was necessarily constrained, talking up reducing costs for businesses and investing in British industry, while also stressing the need for budgetary discipline.

If he was aiming for deliberately dull, he managed it. This was a speech singularly devoid of any significant policy announcements. There was a reconfirmation of money for shipbuilding and a new “local apprenticeship service” will be set up, operating like “football scouts for apprenticeships”, with a team of people who will be able to connect companies that have not previously taken on trainees or apprenticeships with colleges and young people seeking work.

Delegates were instructed to clap his commitment to getting young people into work, which they dutifully did. But there was an organic standing ovation when Healey said he would reintroduce the union learning fund to help workers skill up in the age of AI.

In Liverpool’s conference, there is a bubble-like feeling. Old friends hug, drink and dodge the many “Hope Again” banners. Outside the jamboree, it’s a different story. The public finances are in dire straits as the US-Iran war has caused months of rising bond yields and borrowing costs.

The Budget is a high-stakes moment, as Healey and Prime Minister Andy Burnham pivot from boosterish optimism to a tougher message of tax rises and spending restraint. Donald Trump’s unpopular and ill-designed conflict has had a direct effect on the UK: Healey cannot be as ambitious as he wanted to be. There won’t be a smorgasbord of offers, as there was last year.

“I think if Labour gets through this Budget in one piece, we’ve pretty much won the next general election,” one Labour MP told The i Paper, perhaps unadvisedly making themselves a hostage to fortune. “It’s a balancing act between the tax rises you’re going to have to do and what the markets are going to stomach.”

Burnham, who likes to be liked, has already eyed up some purchases. Now Healey needs to find the money to pay for them. The Prime Minister has already revealed a new equity loan program to help first-time buyers, with the Chancellor to deliver further details at the Budget. Healey also needs to find the cash for Burnham’s electricity VAT cut and find £4.7bn for the funding gap in the £15bn Defence Investment Plan. Then, there’s the possibility of a freeze to fuel duty, which would cost at least another £1bn.

On Sunday, the Prime Minister made a lofty and expensive promise to reform social care. Healey’s only consolation is that paying for it is a problem for 2029, not this autumn. His most memorable line in an unmemorable speech was an attack on the Reform UK leader. Nigel Farage, he said, is like “Liz Truss with a Bitcoin account”.

But, crucially, he made no mention of investment in public services and deliberately avoided possible tax rises. Another headache is that Healey wants to keep enough headroom in case Trump doesn’t sort out the mess of his own making in the Middle East.

The Treasury is in discussions about the acceptable level of fiscal buffer to prevent a gilt sell-off. Reeves opted for headroom of £9.9bn in 2024, but chose to more than double the figure last year to signal discipline. Estimates suggest the fiscal buffer currently stands at somewhere between £8bn and £12bn.

One economist, who is feeding ideas to the Chancellor, told The i Paper the markets will punish the UK with yet still higher borrowing costs if the headroom figure “doesn’t start with a two”, at around £20bn. Others argue Healey has more room for manoeuvre. The Treasury has declined to announce their figure, with one insider saying Healey is aiming for a “decent” buffer.

Given the backdrop, tax rises are inevitable. Options include a potential hike to capital gains tax, higher levies on pensions, plus windfall taxes on banks and oil and gas companies. Labour is also debating whether to charge homeowners with properties worth more than £1.5m.

Amid the hope, Healey repeatedly insisted that his “first duty” as Chancellor was financial discipline and that both he and Burnham were in “lockstep” on the need to meet the previous government’s fiscal rules. In a pointed message to Labour supporters who want to see increased public spending, he warned that there was “nothing progressive” about losing control of the public finances.

“Fresh hope,” he said, could only be built on the “rock” of fiscal discipline.

“John had to do as much as he can within the framework of what the public can bear,” a Cabinet minister told The i Paper. “I don’t envy him.”

What the public can bear is a matter for next month. Then, Healey will have to spell out what he didn’t say in Liverpool: tax rises.