Andy Burnham has reportedly rowed back on plans to raise the tax-free personal allowance. The new PM hinted that he could unfreeze the £12,570 personal allowance in an interview just before he entered 10 Downing Street, as he looks to ease the cost of living for Britons.
No commitment to increase allowance
He said it was "lodged in my mind" as it was “the thing I heard the most on the doorsteps” when campaigning in the Makerfield by-election. But an ally of the Prime Minister told the Financial Times: “There is not any commitment to do it. What he was saying is that people are feeling unheard.”
Another source added that Mr Burnham had looked at making an announcement on increasing the allowance but shied away because of the cost.
Budget review and VAT scrapped on electricity
Mr Burnham told reporters on Monday that the personal allowance would be looked at in the Budget. He added: “Obviously, it’s difficult, given the financial circumstances in which we find ourselves.”
Ahead of entering 10 Downing Street, he had told The Times: “So when people, they’re just characterising me as a tax raiser, well again it’s never that simplistic, is it? The breathing space point is a really serious one. How do we just make people feel better?”
The personal allowance has been kept at £12,570 since April 2021, and the freeze is due to stay in place until 2031.
It comes as Mr Burnham announced that VAT would be scrapped on electricity bills to ease cost of living pressure. He used the first meeting of his Cabinet to say that ministers must give people “a sense that help is coming” but vowed to always “show how we’re going to pay” for policies.
