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.
Domestically, Burnham announced policies capping bus fares at £2 and cutting VAT on household electricity bills. He stated he would take a "careful approach" to the economy, asserting, "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. 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."
Official figures for July showed the government borrowed more than expected. Inflation reached a four-month high of 2.9% in the same month.
Darren Jones claims the policy to pay for the VAT cut by cancelling the previous Labour administration’s digital ID scheme was not costed. He further stated the previous policy had not been properly costed.
Sir Mel Stride claims Mr Burnham was "staring down the inevitable barrel of tax rises" after announcing pledges "without a plan." He added that the Labour Party itself presents the problem.
Staring down the inevitable barrel of tax rises.
Burnham, however, hinted at further support beyond his earlier 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."
Separately, Downing Street stated that a Special Administration Regime (SAR) for Thames Water, which serves 16 million customers, remains 'on the table' but was never going to be 'immediate'. The Prime Minister has reportedly delayed plans to place Thames Water into administration due to eye-watering costs.
Officials raised concerns that the utility would require £2 billion of funding in the coming year alone. The prime minister and chancellor have vowed to adhere to the fiscal rules set by former chancellor Rachel Reeves, despite the prevailing economic pressures.
Burnham has ruled out calling a snap general election, maintaining focus on the current economic landscape. He has refused to rule out tax increases in the upcoming Budget while insisting he will honour manifesto commitments.
He claims pledges to cap bus fares at £2 and lower VAT on household electricity bills are fully funded.