Andy Burnham has confirmed he will run to replace Sir Keir Starmer as Prime Minister of the UK following Starmer's resignation as Labour leader. If successful, Burnham's policies could bring changes to income tax, benefits, state pension, and investments in key services like energy, transport, and water.
Tax Changes Under Burnham
Burnham has hinted at revisiting the income tax personal allowance, currently frozen at £12,570 until April 2031. According to analyst Ms Coles, “While he hasn’t promised that as Prime Minister he would raise it, he does want to consider it.” He has also suggested reintroducing the 50p top rate of income tax, replacing the current 45p rate for earnings above £125,140. Potential changes to council tax, inheritance tax, and stamp duty are also possible. Ms Coles added, “He has mentioned land as being undertaxed and has spoken about reforming council tax and stamp duty, which he says is regressive. Before this campaign he had previously suggested inheritance tax ought to be scrapped and replaced with a ‘care levy’ to fund a more joined up national health service and social care system.”
State Pension Triple Lock Commitment
Burnham has committed to keeping the state pension triple lock, which determines annual increases based on the highest of earnings growth, inflation, or 2.5%. He told the i Paper that tearing up this manifesto commitment would be a “very damaging thing to do.” He has also shown support for WASPI women affected by state pension age changes but stopped short of backing cash payouts, instead suggesting non-cash benefits like earlier access to cheaper travel schemes. Ms Coles noted, “His team clarified that he hadn’t meant full financial compensation.”
Benefits Bill Cuts for Defence Spending
Burnham has said he would cut the benefits bill to boost defence spending, focusing on “rethinking the education system” to get young people into work rather than “crude cuts.” Ms Coles explained, “Burnham has opposed benefit cuts in the past. More recently he has said he would cut the benefits bill in order to boost spending on defence, but that he would focus on providing more opportunities, so that people were able to work, rather than just making short-term cuts.”
Investments and Market Impact
Burnham has indicated stronger public control over energy, transport, and water services, which could affect investors in these sectors. Dan Coatsworth, head of markets for AJ Bell, said, “Burnham’s choice of Chancellor if he becomes Prime Minister could have a major impact on bond markets. Bond investors like boring and dull – they want someone who has a plan where the maths stacks up and they stick to it.” The pound bounced back from early losses after Starmer's resignation announcement, while the FTSE 100 and UK government bond yields remained steady.
