Burnham says no decision yet on raising tax-free allowance ahead of Budget
Andy Burnham has confirmed there is ’no commitment’ from the government to increase the personal tax allowance and said ’we will look at that at the budget’, in an update issued this morning.
At the weekend, Mr Burnham said in an interview with The Times the fact the tax-free allowance had been frozen for five years was “the thing I heard the most on the doorsteps” during the Makerfield by-election campaign. The £12,570 tax free threshold has been frozen since 2021, with more people now having to pay tax as earnings have increased.
But the rumours about the threshold increasing in a tax relief that would affect millions have since been shot down, with the BBC reporting today (July 22) that any plans to increase the allowance was not part of Mr Burnham’s initial plan to tackle the cost of living crisis.
And, in an update this morning, the former Greater Manchester Mayor confirmed there is no commitment to change the allowance ’at this point’ - but added that ’we will look at that at the budget’.
Asked whether he was planning to change the allowance during a visit to Bath, the Prime Minister told broadcasters: “Well, it’s funny these days you can’t answer a question honestly without then people reading everything else into it.
He added: “I want to answer questions honestly in this job, as I said before. I think that’s all about trust in politics and doing politics differently, and I’m determined to keep keep working in that way. It was raised a lot, but I then went on to say, ‘But we’ll have to look at it at the budget alongside everything else’. So no commitment, no unfunded promise.
“It’s just perhaps the way politics is these days and the way people report things, but that was an honest answer. There is no commitment at this point to change, but we will look at that at the budget.”
Asked if tax rises were likely at the budget this year to pay for his cost of living policy blitz, Mr Burnham replied: “No, we’ll take decisions on tax at the budget. This is about reprioritising in this phase. As I say, going to the public’s priorities, the cost-of-living crisis, the housing crisis.
“How much longer are we going to talk about these things without actually doing something to help people? And already in the space of a few days, I’ve made a number of moves that will deal with some of these challenges, although I appreciate there’s a lot more to do.”
The tax free personal allowance - the amount of money that you can earn before paying tax - has been frozen at £12,570 since 2021, with more people now having to pay tax as earnings have increased.
Mr Burnham had added to the Times at the weekend: “So when people, they’re just characterising me as a tax raiser, well again it’s never that simplistic is it? The breathing space point is a really serious one. How do we just make people feel better?”
Mr Burnham said he plans to "stick by" Labour’s 2024 general election manifesto when it comes to taxes, but suggested there is “some room” for “movement on tax”. The Labour manifesto said it would not increase taxes on "working people", including National Insurance, income tax and VAT.
The Prime Minister has made major announcements in his first days as PM, though. In his first major policy since entering Downing Street on Monday, Mr Burnham has said that VAT will be removed from domestic electricity bills from October 1.
And today, Number 10 announced that single bus fares across England will be capped at £2 from January.
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