Andy Burnham’s Sugar-Coated Handouts Won’t Fix the Cost-of-Living Crisis
Andy Burnham entered Downing Street promising to make Britain a “cost of living government”. His message was simple and politically attractive: people are struggling, household bills remain painfully high, and government should give families some breathing space. Within days, he announced a collection of measures designed to put money back into people’s pockets, from cheaper bus fares to reductions in energy costs and tougher action against businesses accused of “rip-off” practices.
There is an obvious political appeal to all of this. When families are worrying about food, energy, transport and rent, a government that promises immediate relief is likely to receive a warm response. But there is a serious question that Burnham cannot avoid: are these measures actually capable of fixing Britain’s cost-of-living crisis, or are they simply a collection of attractive handouts designed to make people feel better without changing the economic conditions that made life so expensive in the first place?
That distinction matters.
Britain’s affordability problems are not caused primarily by subscription traps, expensive bus journeys or misleading supermarket discounts. Those things can certainly irritate consumers and, in some cases, cost households meaningful amounts of money. But the underlying crisis is much deeper. Prices have risen dramatically over recent years, housing remains unaffordable for millions, wages have struggled to keep pace with essential costs and productivity growth remains too weak to provide the sustained improvement in living standards the country needs.
The Joseph Rowntree Foundation has warned that 7.4 million low-income families were unable to afford essential items during the six months covered by its latest tracker—the highest figure recorded since the organisation began its survey in 2021.
That is not a problem that can be solved by a few pounds off a bus journey.
Nor can it be solved by telling people how to cancel their subscriptions.
Burnham’s government has nevertheless placed considerable emphasis on what it calls “everyday fixes”. The prime minister has promised action against fake discounts, difficult-to-cancel subscriptions and other consumer practices that he believes leave people feeling exploited. New rules are intended to make cancellations easier and prevent businesses from advertising discounts that are not genuine. The government estimates that its subscription reforms could save consumers significant sums.
These measures may be worthwhile.
Indeed, there is nothing inherently wrong with making markets fairer or preventing companies from exploiting consumers. If someone is paying for a service they cannot easily cancel, removing that obstacle is sensible. If a “50 per cent off” promotion is based on an artificial reference price, consumers should be protected from misleading advertising.
But there is a danger in confusing consumer protection with economic transformation.
A family struggling to pay rent does not suddenly become financially secure because a streaming subscription is easier to cancel. A young worker unable to afford a home does not solve the problem because a bus journey costs £2 instead of more. And a pensioner facing high household bills does not necessarily feel that the cost-of-living crisis has been resolved because the government has made one component of an energy bill slightly cheaper.
This is the fundamental weakness in Burnham’s approach.
He is addressing some symptoms of Britain’s affordability crisis without yet demonstrating that he can tackle its causes.
His defenders would argue that the early measures are deliberately modest. Burnham himself has said that the immediate policies are intended to provide “breathing space” while a much broader ten-year plan is developed. His first speech as prime minister made clear that longer-term reforms would include education, council housing and a more preventative approach to public services.
That is a reasonable defence.
No government can transform the British economy within its first month. Structural problems take years to resolve, and immediate relief can be valuable even when it does not solve the underlying problem.
But this is precisely why Burnham must be careful about presentation.
If small measures are presented as the beginning of a much larger economic transformation, voters may accept them. If they are presented as the answer to the cost-of-living crisis, expectations will quickly collide with reality.
Britain’s biggest affordability problems are remarkably stubborn.
Housing is one of them.
Rent and mortgage costs absorb enormous portions of household income, particularly among younger adults. Burnham has promised to increase the construction of council homes, arguing that building more social housing is a sustainable way of reducing pressure on households and eventually reducing welfare costs.
That is potentially much more significant than a temporary subsidy.
But houses take time to build.
Planning decisions take time. Land has to be acquired. Infrastructure has to be provided. Construction workers and materials are required. New communities need schools, transport and healthcare.
The benefits may therefore be substantial, but they will not arrive overnight.
The same applies to energy.
Burnham’s government has already announced a reduction in VAT on energy bills from October, alongside other measures intended to reduce household costs.
Again, households will understandably welcome lower bills.
But reducing a tax on energy is not the same as making energy fundamentally cheaper. The underlying cost of producing, importing and distributing energy remains important. Britain also faces long-term questions about energy security, infrastructure and investment.
A temporary reduction can provide relief. It cannot substitute for an energy strategy.
Transport provides another useful example.
Burnham has introduced a £2 cap on bus fares across England, building on his experience in Greater Manchester. He has also announced that disabled people in England will eventually receive free bus travel around the clock, backed by £60 million in funding.
For many people, particularly those on lower incomes, cheaper public transport can make a real difference.
But again, the policy has limits.
A person who does not have enough money to pay the rent is not suddenly financially secure because the bus is cheaper. Someone struggling with childcare costs does not solve their problem through a cheaper commute. A household whose wages have failed to keep pace with housing costs requires more than a discount on transport.
This is why the language of “handouts” has become politically potent.
Critics are not necessarily saying that every individual measure is worthless. They are arguing that Burnham risks creating the appearance of action without addressing the deeper economic weaknesses behind the crisis.
The criticism is especially powerful because Burnham himself has promised something much bigger.
He has repeatedly spoken about changing the way Britain works, not merely adjusting individual prices. His proposed ten-year strategy is supposed to involve economic development, education, housing and greater regional power.
If that plan succeeds, the early “everyday fixes” could eventually be remembered as the opening moves in a broader programme.
If it fails, however, they may look like political sweeteners—small, popular interventions designed to distract from the absence of fundamental reform.
The danger for Burnham is that Britain has been here before.
Governments of different political colours have frequently responded to economic hardship with temporary subsidies, rebates and targeted relief. Such measures can be politically necessary during emergencies. But when they become a substitute for productivity growth, housing reform, infrastructure investment and higher real wages, they merely postpone the underlying problem.
Britain needs an economy in which people can afford ordinary life without requiring government intervention every time prices rise.
That means increasing productivity.
It means building more homes.
It means improving infrastructure.
It means creating better-paid jobs.
It means reducing unnecessary barriers to business investment.
It means producing more energy securely and affordably.
And it means ensuring that economic growth reaches regions outside London and the South East.
Burnham has talked about many of these issues. His emphasis on devolution and regional economic development is potentially one of the most important parts of his political agenda. His experience in Greater Manchester has convinced him that local leaders can often respond more effectively to economic and social problems than central government departments in Whitehall.
That philosophy could produce meaningful change.
But it requires patience and investment.
It also requires difficult decisions.
This is where the prime minister’s political rhetoric will face its biggest test.
It is easy to promise cheaper bills.
It is much harder to create the economic conditions that make those bills permanently more affordable.
It is easy to announce a subsidy.
It is much harder to reform a market.
It is easy to blame businesses for “rip-offs”.
It is much harder to increase competition and productivity.
It is easy to promise more council houses.
It is much harder to overcome the planning, land and construction obstacles that have prevented governments from building enough homes for decades.
Burnham’s political instincts are clearly focused on delivering visible results. That is understandable. After years of political disappointment, voters want evidence that government can actually make their lives better.
But visibility should not be confused with effectiveness.
A government can announce dozens of measures and still fail to improve living standards if the underlying economy remains weak.
The scale of the problem is considerable. Average UK prices have risen by roughly 30 per cent since 2021, according to the House of Commons Library.
Even if inflation slows, prices do not automatically return to their previous levels.
That is an important point that politicians often struggle to explain.
When inflation falls, the rate at which prices increase slows. It does not mean that groceries, energy, rent and other essentials suddenly become cheap again. Households continue to live with the higher price level created by previous inflation.
That is why many voters can feel that the “cost-of-living crisis” is still present even when economic statistics appear to improve.
Burnham understands the political significance of this frustration.
His nationwide cost-of-living tour is designed partly to demonstrate that he is listening to people outside Westminster. Officials have said that he wants to hear about everyday financial pressures and use those conversations to shape future policies.
Listening is important.
But eventually the listening tour has to produce more than a list of complaints.
It has to produce a strategy.
And that strategy must answer the biggest question of all: how does Britain become a country where ordinary people can live comfortably on ordinary incomes?
That cannot be achieved by government subsidies alone.
If the state continually has to compensate households because wages are inadequate and essential services are too expensive, public finances eventually come under pressure. The government then faces the uncomfortable choice of raising taxes, increasing borrowing or cutting spending elsewhere.
Burnham has already promised to maintain fiscal discipline while delivering major reforms. That makes the challenge even greater. Every pound spent on subsidies is a pound that cannot automatically be spent on housing, infrastructure, education, health or long-term economic investment.
This does not mean that Burnham’s measures are necessarily bad.
It means they need to be judged against opportunity cost.
What could the same money achieve if invested differently?
Would a transport subsidy create more lasting benefit than investment in bus infrastructure?
Would a temporary energy tax cut do more for household finances than investment in domestic energy production?
Would consumer regulation make a bigger difference than policies designed to raise productivity and wages?
Those are difficult questions, but they are the questions a serious government must ask.
The danger is that political incentives encourage the opposite behaviour.
Voters notice immediate savings.
They may not notice a planning reform that takes five years to produce thousands of new homes.
They may not notice an investment in vocational education that raises productivity a decade later.
They may not immediately appreciate improvements to infrastructure that gradually transform a regional economy.
Politicians therefore have an incentive to prioritise things that can be announced today and understood immediately.
Burnham has promised to resist that temptation.
His ten-year plan is supposed to be evidence that he is thinking beyond the next headline and the next election.
That is the opportunity.
But it is also the standard against which he should be judged.
The prime minister should not be criticised simply because he wants to help people with immediate costs. Families cannot wait ten years for relief. They need assistance now.
The criticism should instead focus on whether immediate assistance becomes the whole strategy.
Britain needs both.
It needs short-term breathing space for households under pressure.
And it needs long-term reform capable of making that breathing space permanent.
Burnham’s first weeks have demonstrated that he understands the first part.
The second remains unproven.
His government has announced cheaper buses, energy relief and a crackdown on consumer practices that leave people paying more than they should. These policies may save people money, and that should not be dismissed.
But the cost-of-living crisis is bigger than a collection of irritating charges.
It is about whether a full-time worker can afford a home.
It is about whether families can pay their energy bills without fear.
It is about whether wages provide genuine financial security.
It is about whether young people believe they can build a future.
And it is about whether Britain can generate enough economic growth to raise living standards without permanently expanding government support.
Those problems cannot be solved with sugar-coated handouts.
They require structural change.
Burnham has promised that structural change is coming. His ten-year plan, housing programme and regional economic agenda could eventually provide the framework for it.
But until those reforms begin producing results, the prime minister must resist the temptation to treat every small saving as evidence that the crisis has been solved.
The British public does not need a government that merely finds a few pounds here and there.
It needs a government capable of making ordinary life fundamentally more affordable.
That is a much harder task.
And ultimately, that—not the number of subsidies announced, the cleverness of a slogan or the popularity of a £2 bus fare—will determine whether Andy Burnham’s promise of a “cost of living government” becomes a genuine achievement or simply another chapter in Britain’s long history of temporary fixes.