New Prime Minister Andy Burnham has signalled he may raise taxes on the highest earners to help people struggling with the cost of living, leaving the door open to a 50p income tax rate. Speaking to reporters shortly after entering No10, Burnham said he was looking at increasing the tax-free allowance, which has been frozen at £12,500 since 2022, but stressed that any decision would be made in the Budget.
Policy blitz expected this week
Burnham is expected to hit the ground running with a policy blitz in the coming days, including a package of cost of living measures to be unveiled on Tuesday. He said he was considering rent controls, energy bill support, and capping bus fares to help hard-pressed families, but emphasised that no final decisions had been taken. “We are looking at measures that could make a difference this year,” he told reporters in the Downing Street garden.
Tax-free allowance in focus
The tax-free allowance was the most common issue raised on the doorstep in his Makerfield constituency, Burnham said. “It has dragged more people in - pensioners, I think - and that particularly I think has become a growing issue. All of this will be looked at though at the Budget, and obviously it's difficult given the financial circumstances in which we find ourselves.” He added that changing the threshold was “not without significant consequences” but that he was “looking at it.”
When asked if he would consider a 50p rate of tax to fund the change, Burnham replied: “I think that would be just premature to say that. I’ve barely got my feet under the table.” Such a move would mark a departure from Labour's manifesto, which committed not to raise the basic, higher, or additional rates of Income Tax, or VAT.
Social care reform a priority
Burnham also pledged to tackle the crisis-hit social care system, saying: “We need to face it and fix it.” He criticised successive governments for failing to act, noting that corridor care in the NHS was becoming “the norm all year round.” He said: “I think the country needs to step back here and say, 'How have we let a situation kind of just roll on, where we know it's a major issue, and yet no one's got the courage to fix it?' I just think that's quite damning really of my generation of politicians.”
Burnham, whose father has Alzheimer's, said he was ready to use his political capital on the issue. “I would not want to leave office having done what Westminster has done - not just for 15 years actually, I think you're getting close to 30 years - It's not defensible. How many people have lost their homes and their savings in that time?”
Quick relief for families
Burnham said he wanted to give families “some breathing space” through measures that would make a difference this year. “We just want to do some things that people will feel and feel quite quickly. It won't solve everything, it won't take all of the pressure off but it just shows the direction of travel and that we're serious about helping them out.”
