Burnham Pledges "Breathing Room" as Prime Minister, Targets Economic Overhaul
New leader outlines bold vision from Downing Street, promising economic relief and a northern hub for governance.
Callum Smith
Andy Burnham will today pledge to give people "more breathing room" in his inaugural speech as prime minister, signaling a significant shift in economic policy and a direct challenge to decades of established orthodoxy.
Burnham indicated he would take swift action on the income tax personal allowance freeze. This measure has pulled hundreds of thousands into paying income tax.
The personal allowance, frozen at £12,570 since 2021, was originally set to lift in 2027. Former Chancellor Rachel Reeves extended this freeze to 2031.
A basic tax rate of 20 percent applies to earnings above £12,570. A 40 percent rate applies to earnings above £50,270.
Lifting the allowance would provide a boost worth around £295 extra this year in cash terms for a single person aged 25 or over.
These reforms save taxpayers £950 million by 2030/31.
A petition on the Parliamentary petition website has garnered 38,000 signatures, urging an increase in the personal tax allowance to £18,000.
Burnham has long championed devolution and stated that any government spending will not come from extra borrowing. He maintains this as a key fiscal principle.
He also stated, "the country is in a housing trap," calling for a huge "council house building programme" to address the chronic shortage.
The country is in a housing trap.
He vowed that a Burnham government would oversee the "biggest council house building programme since the post-war period." This utilizes vacant public land to reduce costs and accelerate development.
This initiative aims to build more council homes and focus on higher-density development in existing towns. It reinvigorates high streets and protects green spaces.
Meanwhile, Burnham also stated that Westminster has failed to fix the social care system for approximately 30 years. He described the cost to the NHS of delayed discharges and unnecessary admissions as billions annually.
He previously served as health secretary and proposed a National Care Service funded by a levy on estates. His father's experience with Alzheimer's shaped this policy.
Burnham plans to scrap Sir Keir Starmer's digital ID programme. He has made his first Cabinet appointments, including John Healey as Chancellor and Ed Miliband as Foreign Secretary.
Shabana Mahmood has been reappointed Home Secretary. This move signals continuity in immigration policy.
This strategic shift follows Burnham's support for the government’s asylum changes. He voted in favor of legislation to reshape the appeals process and remove barriers to deportation.
Kemi Badenoch has written to Burnham, stating her party will work with him to cut the welfare bill. She calls for him to rule out tax rises and back new oil and gas drilling.
Burnham is expected to unveil a package of cost of living measures on Tuesday. The focus remains on immediate, tangible improvements for citizens.
He has hinted at allowing people to earn more before paying income tax. He also mentioned "asking for a little bit more" in tax from some people, balancing relief with fiscal responsibility.
Crucially, Burnham will stick to the Labour manifesto of not raising the main three taxes: income tax, National Insurance, and VAT. He maintains a core electoral promise.
He has also indicated that pubs, clubs, and music venues will receive a 20 percent cut in business rates. This aims to support struggling sectors.
The UK government previously removed £150 from domestic energy bills by cutting levies and moving them onto taxation. This sets a precedent for direct consumer relief.
Next year, the basic state pension is expected to exceed the current £12,570 starting rate for tax. This potentially increases pensioners' tax liability, presenting a looming challenge for the new administration.
Burnham described his arrival as a "circuit breaker for Britain," pledging to bring "care" back into politics and end rough sleeping. He addresses deep-seated societal issues.
A circuit breaker for Britain.
He is acutely conscious that the UK has had seven prime ministers in a little over 10 years. He stresses the need for more stable and responsible politics to restore public trust.
Burnham will urge the country to be honest about the challenges it faces. He will call for "reflection and resolution," pledging to fix the mistakes of the last 40 years.