UK households have been issued four major tax warnings as concerns grow over Prime Minister Andy Burnham's management of the nation's finances. The Prime Minister spoke today about reforming adult social care, while Baroness Louise Casey launched her “Big Conversation on Care” to seek public opinion on who should receive care, when the state should intervene, and how to pay for it. Casey said "difficult questions" need to be asked about who among those classified as disabled should get state help, as some people “struggling beyond belief” are not receiving enough support.
Burnham's early tax cuts and spending pledges
After taking office, Burnham announced cuts to taxes on electricity bills to give millions of households "breathing space" this winter, and also reduced rates for pubs, clubs, and music venues. However, Nigel Green, CEO of finance firm deVere Group, warned that tax rises and increased government borrowing now look almost inevitable. “Burnham inherited a maxed-out credit card and he’s still tapping it,” he said.
Expert warns of two funding routes
Green argued that a prime minister cannot warn the NHS will collapse, admit there is no timeline to fix it, then keep signing cheques as if the Treasury is bottomless. “Something gives. It will be your taxes, or it’ll be your mortgage.” He said the borrowing route already shows up on mortgage statements rather than tax bills. “Higher gilt yields feed straight into mortgage pricing.” Lenders have already added up to 0.35 percentage points onto fixed rates, according to Green. “Burnham’s spending is already sitting on people’s mortgage statements.”
Four major tax squeezes
The finance expert warned households “should brace for a squeeze” on four major areas: income tax thresholds, dividends, capital gains, and pensions relief. “Fiscal drag has already dragged millions into higher bands without a single rate changing. There’s almost inevitably more to come.” He acknowledged the ambition behind Burnham’s pledges: “Ending rough sleeping, fixing social care, protecting the NHS. Nobody is arguing with the ambition. What’s missing are numbers showing how it all gets paid for.”
Autumn Budget crucial
Green urged Brits to pay attention in October, as the autumn Budget will be the moment that funding details finally appear. “The autumn Budget is now the most important fiscal event of this Parliament. It’ll show whether this government can be trusted with the nation’s finances or whether Britain is watching a re-run of the Liz Truss ‘mini-Budget’ in 2022.”
