Burnham Retreats From £12,570 Tax Threshold Rise as £8.5 Billion Cost Tests Fiscal Rules
Updated
Updated · bbc.co.uk · Jul 22
Burnham Retreats From £12,570 Tax Threshold Rise as £8.5 Billion Cost Tests Fiscal Rules
2 articles · Updated · bbc.co.uk · Jul 22
Summary
Government sources said there are no short-term plans to raise the £12,570 personal allowance, after Andy Burnham rowed back from weekend remarks that had raised expectations of tax relief.
An increase would be costly and hard to fund under Burnham's fiscal-discipline pledge: the Institute for Fiscal Studies estimates unfreezing the threshold would cost £8.5 billion to £9 billion a year.
Labour's 2024 manifesto also limits his room to maneuver by ruling out rises in the basic, higher or additional income-tax rates that could have offset the cost.
Burnham is instead pushing narrower cost-of-living measures, including a VAT cut on household electricity from 1 October worth about £45 a year and a planned cut in England's bus-fare cap from £3 to £2.