British Prime Minister Andy Burnham said on Wednesday that his government would not make any unfunded promises on tax cuts and would instead take decisions on taxation at the next Budget, expected in the autumn.
Burnham made the remarks as he unveiled another measure aimed at helping households cope with the rising cost of living. The new prime minister announced that the maximum price of a single bus ticket in England outside London would fall from £3 to £2 from January, reducing fares by up to one-third, reported Reuters.
The announcement came just two days after Burnham said his government would remove a tax from domestic electricity bills from October 1, a move expected to save households around £45 a year, reported Reuters.
How does Burnham plan to ease cost of living?
Alongside his cautious approach on taxes, Burnham spoke about introducing measures that offer immediate financial relief. From January, the government will cap single bus fares at £2 across England outside London. London will continue to operate under its own fare system because transport in the capital is managed separately.
The government estimates the bus fare cap will cost more than £500 million. Around £100 million will come from the existing transport budget, while another £400 million will come from the Department for Energy Security and Net Zero, reported Reuters. The government plans to free up that money by replacing some grants for international climate projects with loans.
Burnham said the early measures are designed to give people more “breathing space” as households continue to deal with higher living costs. “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,” he said.
The electricity tax cut announced earlier this week is also part of that strategy. Together, the electricity bill relief and lower bus fares represent Burnham’s first attempt to show voters that his government intends to deliver practical support soon after taking office.
What did Burnham say about taxes?
Burnham sought to calm speculation that his government was preparing major tax changes later this year. “We’ll take decisions on tax at the Budget,” he said, as reported by Reuters.
He said the government’s immediate priority was to reorganise spending rather than announce costly tax measures. “Our immediate focus is reprioritising spending to deal with issues like the cost of living and housing,” Burnham said.
One issue attracting attention is the tax-free personal allowance, which has remained frozen since 2021. As the wages have increased over the past few years, more people have started paying income tax or have moved into higher tax brackets without any change in tax rates. Economists often refer to this as “fiscal drag.”
Asked whether the government planned to increase the personal allowance, Burnham ruled out making promises before the Budget. “There is no commitment, no unfunded promise,” he said, as reported by Reuters.
He added that ministers would examine the personal allowance alongside other tax measures before taking a final decision in the autumn.
Any increase in the allowance could cost the government billions of pounds in lost tax revenue. Investors are closely watching how Burnham plans to maintain fiscal discipline while also delivering support for households.
Burnham has repeatedly said he wants to improve living standards without making spending commitments that the government cannot afford.
