Andy Burnham's leadership as the UK's seventh Prime Minister in a decade has sparked curiosity and speculation about the potential winners and losers under his administration. While his inaugural speech focused on ending rough sleeping and addressing the cost of living crisis, the details of his policies and their impact on various demographics are still emerging. Here's a breakdown of who could benefit and who might face challenges under Burnham's leadership.
Winners:
Households
Burnham's team is reportedly considering several measures to alleviate the cost of living burden on households. These include a VAT cut on energy bills, which could save families around £94 annually. Additionally, the push to extend fixed-price contracts for older wind and solar farms may help stabilize electricity costs, preventing them from being passed on to household bills. The extension of the £2 bus fare cap to the rest of the country is another potential win for households, especially in areas where public transport is crucial.
High-Street Businesses
The Prime Minister has pledged to cut business rates for pubs, clubs, and music venues by 20%, and to introduce a higher threshold before small hospitality and retail firms start paying business rates. This move aims to provide much-needed relief to struggling businesses, particularly in town centers. Burnham's willingness to listen to the voice of small businesses and consider reversing the increase in employer national insurance is also a positive sign for the high street.
Pensioners
Burnham has committed to keeping the state pension triple lock until at least 2029, ensuring that pensioners' incomes keep pace with inflation, wage increases, or a minimum of 2.5%. This guarantee is a significant win for pensioners, who have faced the brunt of economic challenges in recent years. Additionally, Burnham's plan to raise the income tax personal allowance and address the growing number of pensioners being dragged into paying tax is a step in the right direction.
Losers:
Wealthy Homeowners
The potential lowering of the threshold for the mansion tax from £2m to £1.5m could affect around 150,000 more homes, raising approximately £800m annually. This change would be particularly impactful in London and the South East, where high-value properties are prevalent. While the mansion tax is often seen as a progressive measure, it may still be a burden for wealthy homeowners.
High Earners
Burnham has expressed interest in aligning capital gains tax with income tax bands, which could result in higher tax rates for high earners. The Prime Minister has also signaled openness to a wealth tax, suggesting that the public might be asked to contribute more at some point. These moves could potentially impact high earners and those with significant assets.
Inheritors
The idea of replacing inheritance tax with a 'national care levy' to fund a National Care Service is a significant shift in policy. While this could provide a more universal approach to funding social care, it may also mean that very large estates pay less than they do now, while smaller estates that currently pay nothing start contributing. This could have implications for inheritors and the distribution of wealth.
As Burnham's administration takes shape, these potential winners and losers will be closely watched, with the hope that his policies will bring about positive change for the majority while also addressing the needs of those who may face challenges.
