Faisal Islam: The new PM has big ideas - but what will they cost?
BBC News 2026-07-20 16:51:54
Context: The new Prime Minister, Andy Burnham, is facing the challenges of implementing his policy changes while dealing with the constraints of high national office. He has described his plans to address the cost of living crisis, but the specifics of how he will fund these initiatives remain unclear. Burnham's proposals have already had an impact on the markets, with the UK government's 10-year borrowing rate rising above 5% on Monday.
Key Facts
- The UK government's 10-year borrowing rate rose above 5% on Monday, following suggestions that Prime Minister Andy Burnham would use "flexibility" in his borrowing rules to fund new announcements.
- Burnham's plan to unfreeze the income tax threshold could cost at least £4bn, depending on the rate of inflation, with some unions suggesting that it should be rolled back to what it would have been if the freeze hadn't been implemented in 2022.
- The current income tax threshold freeze, implemented by then-chancellor Rishi Sunak, is set to continue until 2030-31, pushing one in six workers into the 40p bracket.
- Burnham has also announced plans to publish a 10-year plan for the country and the economy, which is likely to include details on decentralization, devolution, and rebuilding Britain.
- The Prime Minister's first priority is a national plan to end rough sleeping, which he aims to address by releasing funds from within the housing budget and building mass council houses, a process that will take years to feed through.