New Prime Minister Andy Burnham has confirmed a plan to cut energy bills, using his first speech outside Number 10 Downing Street on Monday to promise relief for households. The Labour leader announced that the government would unveil “some breathing space” on Tuesday for people struggling with the cost of living, with measures including lower energy bills and reduced bus fares, all part of a fully funded package.
Fiscal Prudence and Market Stability
Burnham emphasised his commitment to fiscal responsibility, stating, “I’ve said we’ll stick to the fiscal rules and by that I mean the existing fiscal rules and use, obviously, any flexibility within them. So none of this is about taking risks with the economy. I’ve never done that in any role that I’ve had. I’ve always taken a very prudent approach.”
However, concerns about market reaction remain. One member of Burnham’s team cautioned, “We need to be very careful. We need to show that he’s serious about change as the public will form their opinion of him very quickly. But we have to avoid a Liz Truss-style moment: it’s almost like the markets are waiting to be spooked.”
Balancing Change and Peril
Another senior team member added, “We know that there’s a very delicate balance between capturing people’s attention and not spooking the markets. Next week is a moment of real peril for Andy and, while change is priced in, it feels like they’re teetering.”
Social Tariff Proposal
One option under consideration, championed by charities and the regulator, is the introduction of a social tariff. This would offer discounted bills to the most vulnerable households, funded through higher bills or taxes on those who are better off. Debt charity Citizens Advice highlighted the ongoing crisis: “Although average bills have dropped back from their peak, they are still far higher than they were five years ago. But incomes and bill support mechanisms have not kept up. Households are left with mounting energy debts, forced to choose between heating and eating.”
Burnham reiterated his stance, saying, “I’ve said we’ll stick to the fiscal rules and by that I mean the existing fiscal rules and use, obviously, any flexibility within them. But we will stick to the existing rules. So none of this is about taking risks with the economy. I’ve never done that in any role that I’ve had. I’ve always taken a very prudent approach.”
