Burnham Refuses to Rule Out Tax Rises Amid Economic Tightrope Walk
Prime Minister balances popular pledges with fiscal realities as inflation hits four-month high and borrowing exceeds expectations.
Carla Rooney
Prime Minister Andy Burnham has refused to rule out tax rises in his first budget.
Burnham announced a series of policies, capping bus fares at £2 and implementing a VAT cut on household electricity bills. He vowed strict adherence to the fiscal rules previously established by former chancellor Rachel Reeves.
He asserted a "careful approach" to the economy, stating, "I will always take a careful approach to things. I ran Greater Manchester for 10 years and we ran a very tight ship with rock solid finances. Nothing will change as I come into this role as prime minister."
Nothing will change as I come into this role as prime minister.
Burnham continued, "I won't take risks with people's jobs or their livelihoods or their family finances. I will try to help them in whatever way I can, I have already done some things that will help them."
Darren Jones claims the proposed VAT cut, intended to be funded by cancelling the previous Labour administration’s digital ID scheme, lacked proper costing. Jones further stated the previous policy itself had not been properly costed.
Burnham hinted at additional support beyond his initial announcements aimed at tackling the cost of living. He stated, "They don’t necessarily need to accept that. What I have put out so far, I wouldn’t say is everything, but they are the first steps and they are significant."
Speculation now surrounds potential changes to pension tax relief or the tax-free lump sum. A group of "Patriotic Millionaires" has also proposed a wealth tax on assets exceeding £10 million.
Capital Gains Tax currently stands at 18% for basic-rate taxpayers, increasing to 24% for higher and additional-rate taxpayers.
Separately, Downing Street confirmed a Special Administration Regime (SAR) for Thames Water remains 'on the table'. The utility serves 16 million customers, but the SAR was never going to be 'immediate'.
The Prime Minister has reportedly delayed plans to place Thames Water into administration due to exorbitant costs. Officials raised concerns that the utility would require £2 billion in funding within the coming year alone.