Burnham pulls back on suggestion to increase tax-free personal allowance
BBC News 2026-07-22 01:43:54
Context: Andy Burnham, the Prime Minister, has pulled back from suggesting an increase to the tax-free personal allowance, citing the country's financial circumstances. The allowance has been frozen at £12,570 since 2021, and Burnham had previously expressed frustration about the issue while campaigning in the Makerfield by-election. He has committed to Labour's 2024 manifesto, which includes a promise not to increase income tax rates.
Key Facts
- The tax-free personal allowance has been frozen at £12,570 since 2021, resulting in more people being dragged into paying tax as earnings increase.
- Burnham told the Times over the weekend that the "frustration about the personal allowance" he had heard while campaigning in the Makerfield by-election was "lodged in my mind".
- The Institute for Fiscal Studies has estimated that unfreezing the threshold could end up costing £8.5-9bn a year.
- Burnham has committed to Labour's 2024 manifesto, which included a promise not to increase the basic, higher, or additional rates of income tax.
- On Tuesday morning, Burnham announced a VAT cut to household electricity bills from 1 October, saving a typical household about £45 a year, with the estimated £850m cost funded by scrapping Sir Keir Starmer's digital ID scheme.