Tag Archives: personal allowance

In his first interview as Labour’s presumptive Prime Minister, Andy Burnham told the Sunday Times that one issue kept coming up on the doorstep in Makerfield: the frozen £12,570 personal allowance. He called it a growing issue. Within days of walking into Downing Street he had told the Financial Times there was no commitment to do anything about it.

That is a let down for anyone earning near the threshold. It is also a gap in the defence, and we should run through it.

He raised the subject, then walked away from it

Politicians do not usually hand their opponents a grievance. Burnham did. He spent months telling voters that the freeze was unfair, that it was dragging people who are not well off into paying tax they should never have paid, and that Westminster was not listening. He was right. Westminster was not listening. Unfortunately, having become the boss himself, he has proved that it still is not.

What he offered instead was an £850 million package taking VAT off household electricity. It is worth about £45 off a typical annual bill, and rather more than that if you are wealthy enough to own a large house and use a lot of power. It is planned for this financial year only. And because the saving rises with the amount you use, it gives nobody any reason at all to take less from the grid. Alongside it came a cut in the bus fare cap to £2 and a month of free travel for under 15s.

Cheaper buses are good. Lower bills are good for households, even if they are not necessarily good for the environment. But set it against the freeze, which now runs to April 2031, and the sums do not work. Our own figures show 1.9 million more people being dragged into the higher rate between 2025 and 2030. Victoria Collins has costed the wider threshold freeze at £67 billion a year for ten million taxpayers by the end of the decade. Against that, £45 for one winter is a press release, not a plan.

Voters are perfectly capable of doing that arithmetic. They will do it in October when the bills arrive.

The policy is already ours

Here is the part we keep forgetting. We do not need to invent anything. What we need to do is stop saying five words: “when the public finances allow”.

That caveat kills the policy. It turns a principle into a wish. No number, no date, and no answer to the only question anyone ever asks.

Because the policy itself is strong. Raising the personal allowance is the single most successful thing we did in government. Between 2010 and 2015 we lifted more than three million people out of income tax altogether. Not by means testing. Not by a scheme people had to apply for. Just by letting people keep more of what they earned before the state took any of it.