Andy Burnham, the new Labour leader and incoming Prime Minister, has indicated that the government may reconsider the personal tax-free allowance, currently frozen at £12,570 until 2031. Speaking to The Times before formally taking office, Burnham said the freeze in Income Tax thresholds was "the thing I heard the most on the doorsteps" and that the issue was "lodged in my mind."
Petition Calls for £18,000 Allowance
A petition on the Parliamentary website, backed by 38,000 signatures, urges the government to raise the personal tax allowance to £18,000. It argues that since 2021, the allowance has been frozen at £12,570, and the freeze, originally due to expire this year, has been extended to 2031. The petition states: "If you are earning minimum wage then you may soon be paying tax because of fiscal drag. Some higher earners pay little or no tax due to clever use of accounting rules. We think this is so wrong."
Speculation on Policy Change
Burnham's comments have prompted speculation that the government could look again at the £12,570 personal allowance, which has been frozen since 2022. Currently, the allowance is set to remain at that level until 2031. However, deputy Labour leader Lucy Powell, a prominent Burnham ally, attempted to downplay reports of a major policy shift.
Powell Clarifies Stance on North Sea Drilling
In an interview with the BBC’s Laura Kuenssberg, Powell addressed reports that Burnham would issue new licences for oil and gas drilling in the North Sea. She said the Labour manifesto policy—"we will not issue new licences to explore new fields"—would still apply, but there might be a "change of emphasis." She added: "I think what Andy is talking about is taking a more pragmatic approach and working with the industry to make sure that it can contribute to that transition and to the mix that is needed over the long term. So, let’s see what he’s got to see about that, but I don’t think it’s a change of policy. It’s more a change of emphasis."
