The Prime Minister
Andy Burnham has made lots of commitments as Prime Minister already (Image: Getty)
UK households have been issued with four Andy Burnham tax warnings as concerns grow about how he will manage the nation’s finances. The Prime Minister spoke today about how he wants to go about reforming adult social care. Baroness Louise Casey said that “difficult questions” need to be asked about who among those classified as disabled should be getting help from the state, as some people “struggling beyond belief” are not getting enough. Her “Big Conversation on Care” was launched, which will seek public opinion on what a social care system should look like, including who should get care and when the state should step in as well as how to pay for it.
After taking office, Mr Burnham announced that taxes on electricity bills would be cut, giving millions of households “breathing space” this winter. He has also cut rates for pubs, clubs and music venues. But tax rises and increased Government borrowing now look almost inevitable, Nigel Green, the CEO of finance firm deVere Group, warned. “Burnham inherited a maxed-out credit card and he’s still tapping it,” he said
Nigel Green has issued his verdict on Burnham’s first days as PM (Image: Getty)
“A Prime Minister cannot warn that the NHS will collapse, admit he has no timeline to fix it, then keep signing cheques as if the Treasury is bottomless. Something gives. It will be your taxes, or it’ll be your mortgage.”
Mr Green said the borrowing route carries its own cost, which is already showing up on mortgage statements rather than tax bills.
He said: “If it’s borrowing instead, ordinary families still pay, just somewhere else.
“Higher gilt yields feed straight into mortgage pricing.” Mr Green said that lenders have already added up to 0.35 percentage points onto fixed rates. “Burnham’s spending is already sitting on people’s mortgage statements,” he added.
The specialist thinks there are only two routes to fund pledges on the scale Mr Burnham has so far outlined, and every signal from Downing Street points to both being used at once.
Four tax warnings
The expert warned households “should brace for a squeeze” on four major things:
- Income tax thresholds
- Dividends
- Capital gains
- Pensions relief
“Fiscal drag has already dragged millions into higher bands without a single rate changing. There’s almost inevitably more to come.”
He added: “Ending rough sleeping, fixing social care, protecting the NHS. Nobody is arguing with the ambition,” says Nigel Green.
“What’s missing are numbers showing how it all gets paid for.”
Brits should pay attention in October, Mr Green said, as the autumn Budget will be the moment that number finally has to appear.
“The autumn Budget is now the most important fiscal event of this Parliament,” he said.
“It’ll show whether this government can be trusted with the nation’s finances or whether Britain is watching a re-run of the Liz Truss ‘mini-Budget’ in 2022.”