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Burnham Rejects Raising Frozen £12,570 Allowance, Cites Billion-Pound Cost

7/22/2026

35 3 Full Breakdown

Summary

Story summary

Prime Minister Andy Burnham said he has no commitment to raise the £12,570 allowance, frozen since 2021 until 2031.
He warned a £100 rise would cost £1 billion a year, while a 10% rise would cost £11.7 billion.
Burnham and Chancellor John Healey scrapped a 5% energy tax.
Reform UK withdrew its £20,000 allowance pledge, which the Institute for Fiscal Studies warned could cost up to £80 billion a year.

History

Historical Context

After the 2010 Conservative-Liberal Democrat coalition, Chancellor George Osborne announced £6.2 billion of spending cuts and a 2 % departmental budget reduction, launching Britain’s first post-war austerity programme. The measures aimed to eliminate the structural deficit by 2015-16 and sparked IMF warnings. Decades of similar restraint now shape today’s fiscal debate over personal-allowance freezes and energy-tax scrapes.

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Story summary

Prime Minister Andy Burnham said he has no commitment to raise the £12,570 allowance, frozen since 2021 until 2031.
He warned a £100 rise would cost £1 billion a year, while a 10% rise would cost £11.7 billion.
Burnham and Chancellor John Healey scrapped a 5% energy tax.
Reform UK withdrew its £20,000 allowance pledge, which the Institute for Fiscal Studies warned could cost up to £80 billion a year.

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