Andy Burnham has indicated that the £12,570 personal allowance – the threshold at which people start paying income tax – could be increased, potentially providing a boost for millions of workers. The incoming Prime Minister made the remarks as he prepares to enter Downing Street, vowing to address the cost-of-living crisis.
Burnham Highlights Doorstep Concerns
Speaking ahead of his formal appointment by the King, Burnham said the freezing of income tax thresholds since 2022 was “the thing I heard the most on the doorsteps” during the recent Makerfield by-election. He stressed that the issue was “lodged in my mind” as he prepared to form a government. “So when people, they’re just characterising me as a tax raiser, well again it’s never that simplistic is it?” he told The Times. “The breathing space point is a really serious one. How do we just make people feel better?”
The freeze on income tax thresholds, first introduced by Rishi Sunak and extended by Chancellor Rachel Reeves until 2031, has acted as a stealth tax, dragging hundreds of thousands more people into paying the 20p basic rate or 40p higher rate and raking in tens of billions of pounds for the Treasury.
Potential Tax Rises for the Better Off
While Burnham signalled relief for lower earners, he also hinted that taxes on the better off could increase, a move that could hit London particularly hard. He has been in talks with the Treasury in recent days and is expected to announce a series of measures to ease the cost-of-living crisis still affecting many households.
In a day of high political drama, Sir Keir Starmer delivered a speech in Downing Street after resigning as Prime Minister following a large Labour revolt, before heading to the Palace to meet the King. Burnham will follow Starmer and deliver his first speech as Prime Minister, laying out a “ten-year plan”.
Devolution and Housing Pledges
Burnham has already set high expectations for his premiership, vowing to undo what he sees as the damage of 40 years of “neoliberalism”, which he says has not benefited many communities. He has pledged the “biggest devolution of power in modern times” and the largest council homes building programme in the post-war period.
In his speech, Burnham was expected to urge the country to be honest about the challenges it faces and call for “reflection and resolution”. He will also say he is “acutely conscious” that the UK has had seven prime ministers in the last decade, stressing the need for more stable and responsible politics and pledging to restore faith in government. Crucially, he will seek to offer hope and optimism, particularly for left-behind communities.
Cabinet Appointments and Policy Priorities
Burnham is expected to name his Cabinet in the afternoon, with speculation that Energy Secretary Ed Miliband or Home Secretary Shabana Mahmood could become Chancellor. Several London MPs may lose their current jobs in the reshuffle. Burnham has also announced he will scrap Sir Keir’s flagship digital ID programme to focus money and attention on the cost of living.
Reports suggest cost-of-living support could include action on energy bills, potentially allowing more oil and gas drilling in the North Sea. Burnham also faces the Thames Water scandal and may consider putting it into a special administration regime to find a buyer. Another priority is reforming social care, which he has said he wishes to “expend political capital” on.
Conservative Response
Conservative leader Kemi Badenoch has written to Burnham, offering to work with him to cut the welfare bill but calling on him to rule out tax rises and back new oil and gas drilling. Despite his calls for less confrontational politics, she said she would “never shirk” from holding him to account, adding: “You will enter office without having set out a clear plan on any of the issues facing our country. You have refused calls to come to Parliament for questions from MPs, and you have not submitted yourself to serious media scrutiny. This is not a promising start.”
