Key facts
- Prime Minister Andy Burnham has promised new policies to help with the cost of living.
- Potential measures include changes to income tax, property taxes, and energy bills.
- The government aims to build more council homes to address housing affordability.
- The state pension triple lock is expected to be maintained.
- The impact of external events on personal finances is a significant consideration.
In his inaugural address as prime minister, Andy Burnham has pledged to provide greater financial relief to citizens struggling with the cost of living. Specific policy announcements are anticipated on Tuesday, his first full day in office, with a focus on easing financial pressures that have impacted many households.
Burnham's administration is expected to explore measures such as supporting energy bills, reducing transport costs, and making housing and care more affordable. However, these initiatives will necessitate difficult decisions regarding funding and potential trade-offs. The effectiveness of these policies will also depend on managing external economic shocks, as demonstrated by the recent impact of geopolitical events on energy prices.
The government is considering changes to income tax, potentially by adjusting personal allowance thresholds, which have been frozen until April 2031. While the Labour manifesto precludes increases to income tax, National Insurance, and VAT, other taxes, such as inheritance tax and capital gains tax, could be reformed. Alternative property taxes are also being explored as possibilities.
Regarding energy costs, a previous promise to cut household bills by £300 by 2030 remains a key point of scrutiny. The introduction of a social tariff for vulnerable customers, funded by higher charges for others, is a potential avenue. The significant issue of accumulated energy debt, now at a record £4.79 billion, also requires attention.
Drawing on his experience as mayor of Greater Manchester, Burnham may implement policies affecting transport fares. Existing measures include a £3 cap on bus fares outside London and a freeze on rail fares until March 2027. The government also plans to increase the supply of council homes to address housing affordability.
Beyond immediate cost of living concerns, Burnham's government faces complex decisions regarding sickness and disability benefits, employment initiatives, and social care access. The commitment to maintaining the state pension triple lock is also a significant fiscal consideration.