In his opening days as prime minister, Andy Burnham is preparing to introduce measures aimed at providing financial relief for families struggling with rising costs. Burnham has noted that many citizens currently find themselves unable to afford basic leisure activities or vacations due to tightening household budgets. Addressing these expenses remains his primary stated objective.
Burnham is exploring adjustments to income tax thresholds, specifically looking to increase the personal allowance. However, this poses a fiscal challenge, as current tax bands are frozen until 2031. To fund such changes while adhering to Labour’s manifesto pledge against raising income tax, National Insurance, or VAT, the government may consider adjustments to other areas like capital gains tax or inheritance tax. These potential reforms carry the risk of political backlash and market instability.
Regarding energy, the administration is evaluating options to improve affordability, including a possible social tariff for vulnerable populations. With consumer energy debt reaching a record £4.79bn, the government faces pressure to act, though wholesale gas prices remain a significant external constraint. Similar challenges exist in housing, where Burnham plans to expand social housing availability to mitigate the costs associated with the private rental market.
Transport costs also remain a focus, with existing caps on bus fares and rail price freezes in England set to continue through early next year. Ultimately, the effectiveness of these policies will depend on how the administration navigates complex fiscal rules and responds to unpredictable global events that influence the national economy.
