Oh dear. It is only day three of Andy Burnham’s premiership and his policy blitz is already descending into quite the shambles. Ministers are scrambling to explain how the government’s two set piece cost of living interventions will be funded.
The first – removing VAT from energy bills at a cost of £850 million – was supposed to be paid for using cash earmarked for the now-scrapped digital ID scheme. But lo and behold, no such money ever existed: the programme was unfunded. Then came this morning’s announcement that the £2 bus fare cap in England – a policy introduced by the Tories – will be reinstated. According to the government, its £454 million price tag will be covered by ‘switching investment set aside for international climate finance to loans’. Yet no minister has been able to explain the terms of these loans, their interest rates or anything resembling a repayment schedule.
Then, of course, there is ‘our Andy’s’ first big fiscal U-turn. The Prime Minister told reporters on Monday that he wanted to raise the £12,570 personal tax allowance, which has been frozen since 2021. It was the number one issue raised on the doorsteps of Makerfield, Burnham cried. Cut to Tuesday night, however, and aides were insisting that the policy was a non-starter. It had, after all, been pointed out that a £500 increase in the personal allowance would cost the Treasury £5 billion – while saving a basic-rate taxpayer a paltry £100 a year.
Shadow transport secretary Richard Holden blasted:
How Labour will pay for these policies? Labour MPs will not take the hard choices like cutting the surging benefits bill. That is why borrowing or taxes will have to rise to pay for their pledges.
Three days in, Burnham may have capped the bus fare – but there appears to be no limit on his fiscal fantasy.
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