Andy burnham hints at raising UK's tax-free threshold

Andy Burnham's first act as prime minister may not be a policy rollout; it's expected to be a signal. Hours before formally taking over from Keir Starmer, Burnham told The Times he's looking closely at raising the personal allowance, the £12,570 threshold below which people pay no income tax at all.

It has been a static factor that silently pushes many more workers into higher rates as salaries grow around an immobile threshold; this system is called the “stealth tax” and has generated billions of extra revenue for the exchequer without even adjusting the rate.

Loosening this freeze is now part of Burnham’s vision of providing people “breathing space” from the cost-of-living squeeze, though he has been careful not to get into specifics. 

It seems that this week may also see announcements relating to energy prices, bus fares, and even tax breaks for the hospitality and high street sectors.

Raising the personal allowance isn't free. Any move to lift it would need to be paid for, and doing so without a clear funding plan carries real risk with markets watching how the new government handles its first fiscal moves.

Burnham has rejected his label as a "tax raiser", arguing that the label is not enough because there is more depth to the issue. However, how he will pay for it remains unclear.

What awaits Andy Burnham on his first day as UK PM?

Along with the public ceremony, Burnham's journey to 10 Downing Street has its private moments as he says that his father, who has always supported the Labour Party and is currently suffering from Alzheimer's disease, does not even realise that his son is becoming prime minister.

It is a perfect example of formality, as the whole process will be carried out just right, a farewell speech by Starmer, his resignation before King Charles at Buckingham Palace, followed by Burnham's audience with the King, and finally coming to Downing Street.

Once in office, Burnham will be briefed on urgent outstanding security matters and given access to the nuclear codes, according to Gus O'Donnell, who served as cabinet secretary under three previous prime ministers. That briefing reportedly includes contingency scenarios such as how the government would respond if the UK's nuclear submarines were ever targeted.