PM Plays Hard to Get on Tax Rises, Cites 'Challenging' Finances and a Bus Fare Cap
Andy Burnham refuses to rule out tax rises while promising to be 'careful' - because nothing says careful like borrowing more than expected and hoping for the best.
Andy Burnham has mastered the political art of saying a lot without saying anything definitive, refusing to rule out tax rises in the upcoming autumn Budget while insisting he "won't be unrealistic" about the "challenging" state of public finances.
The prime minister, who took office in July with a promise to give people "breathing space," is now discovering that breathing space is expensive. He defended his previously announced cost of living pledges as funded spending commitments, which is a bit like calling a leaky bucket watertight - technically true until it isn't.
Questions remain over how major policies like social care reforms will be funded, and experts have warned that Burnham and Chancellor John Healey will have about as much financial room to manoeuvre as a giraffe in a phone booth when they present their first Budget on 28 October.
Speaking during his first visit to Ukraine, Burnham said the policies announced so far - including capping bus fares at £2 and cutting VAT on household electricity bills - were "the first steps that I've felt able to make," made possible by reprioritising funding from elsewhere. "I took the decision early on that digital ID wasn't the top priority for now," he told ITV, presumably to the relief of the four people who wanted it.
Asked if the public needed to accept that some new policies would require tax rises, Burnham said they wouldn't necessarily have to accept that. Pushed further, he channeled his inner accountant: "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." He added, "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."
Burnham previously admitted to the BBC that his earlier cost of living measures aren't enough on their own, hinting at further support. During his first official overseas visit on Monday, he said, "I won't be unrealistic and people really need to understand that. We are in a challenging position, whatever I do will be carefully thought through, it will be funded and there will be more to come as we go into the autumn."
Last week, official figures showed the government borrowed more than expected in July, despite a record month for income tax receipts. Inflation hit a four-month high of 2.9% in July and is expected to rise further due to the ongoing impact of the Iran war on energy prices and fuel costs.
Experts have warned Burnham and Healey that they must either raise taxes or cut spending elsewhere, as pressure on public finances has left no room for extra borrowing. Both leaders have vowed to stick to the fiscal rules set by former Chancellor Rachel Reeves, which are designed to ensure day-to-day spending is funded through tax revenue by the end of Parliament and to reduce debt as a proportion of GDP.
In related news, the PM admitted cost of living help is not enough and hinted at further support, while also warning that the Iran war could hit UK growth next year. So, plenty of good news to go around.
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