In his first speech as prime minister, Andy Burnham has promised to give people more "breathing space" to help with the cost of living - because nothing says relief like a politician talking about your finances. Policies will be announced on Tuesday, his first full day in the job. A few hours after taking office, the new PM confirmed he will be "looking at" the tax-free personal allowance ahead of his first Budget in the autumn. Translation: he's thinking about it, which is more than most of us can do while staring at our energy bills.
The cost of living has dominated people's lives in recent years, and - to some extent - our politics too. Easing that pressure hasn't been easy. Burnham faces tough choices on funding moves like supporting energy bills, transport costs, and making care and housing more affordable. His new chancellor, John Healey, will have to deliver any changes and outline how to pay for them. No pressure, John.
Interestingly, the words "every minute not talking about the cost of living is a wasted minute" and "number one focus" were spoken not by Burnham and Healey, but by Sir Keir Starmer and former chancellor Rachel Reeves - in January this year. They removed £150 from a typical annual domestic energy bill in April by cutting some levies and moving others onto taxation. But bills soon went up again due to US-Israeli strikes on Iran. As Adam French of Moneyfacts puts it: "A more volatile world is a more expensive world."
Burnham says he will "look at" allowing people to earn more before starting to pay income tax, shifting the personal allowance. He admitted on his first day that changing it would be "difficult" in the current economic circumstances. Under existing policy, income tax and National Insurance thresholds are frozen until April 2031 in England, Wales and Northern Ireland, meaning a greater proportion of income is taxed as you earn more. Partially reversing that would require finding money elsewhere or borrowing. Burnham has also hinted at "asking for a little bit more" in tax from some people. So the breathing space might come with a price tag.
He will stick to the Labour manifesto of not raising income tax, National Insurance, and VAT. But other taxes can be altered, as seen with inheritance tax changes affecting family farms. Options include replacing stamp duty and council tax with an alternative property tax, or higher rates on capital gains tax. Any such reforms would bring winners and losers, and Burnham's predecessors learned the hard way that big majorities don't prevent u-turns.
Burnham and Healey are expected to stick to the government's self-imposed fiscal rules. Opinion is divided on whether these are sensible building blocks or a "dysfunctional" economic straitjacket. Rachel Vahey of AJ Bell says the resulting "rummage down the back of the sofa for loose change has hit personal finances hard." Meanwhile, Labour's promise to cut household energy bills by £300 by 2030 remains under scrutiny. In Downing Street, Burnham said he would "bring essentials under public control" to make them more affordable.
One option is a social tariff offering discounted bills to the most vulnerable, paid through higher bills or taxes from those better off. Unpaid energy debt is at a record high of £4.79bn, up 15% in a year. Citizens Advice says households are "forced to choose between heating and eating." On transport, Burnham's experience as mayor of Greater Manchester may help, but devolution limits his control to England. The £3 cap on bus fares in England outside London is voluntary and not all companies have signed up. Rail fares were frozen until March 2027.
On housing, Burnham told The Times that without "sufficient homes for people that they can afford, you chase rent through the benefits system." Hence his plan to build more council homes, alongside the government's ambitious but behind-schedule home-building target. Some lenders offer first-time buyers smaller deposits, but the Bank of Mum and Dad remains a major lender. Building societies want less strict lending rules.
Burnham also faces decisions on sickness and disability benefits, getting young people into work, and reforming social care. He said he "does not want to leave office" without tackling social care - a complex, expensive policy others have failed at. He'll stick with the state pension triple lock, which increases pensions by the highest of inflation, average wages, or 2.5% each year. Finally, as always, events beyond his control may have the biggest impact on people's pockets.