Andy Burnham has declined to rule out raising taxes in his autumn Budget, saying he would not be “unrealistic” about the state of the public finances.
Speaking to ITV News while in Ukraine on Monday, the Prime Minister vowed to take a “careful approach” to the country’s finances – and said he “won’t take risks” with people’s jobs or livelihoods.
However, Burnham did admit that the UK is in a “challenging position” financially.
He said: “Whatever I do will be carefully thought through. It will be funded. That is exactly what I have done so far but there will be more to come as we go into the autumn.”
The four signs the UK’s stance towards Russia is escalating
Andy Burnham has faced down threats from the Kremlin over Britain’s increasing support for Ukraine by telling Vladimir Putin he “started the fire”.
Burnham says he won’t back down
The war of words broke out after Moscow warned that the UK sharing long-range missile blueprints with Kyiv would “add fuel to the fire” of the conflict.
During a visit to Kyiv on Monday, to mark the anniversary of Ukraine’s independence from the Soviet Union, Burnham insisted there would be no backing down from assistance to Kyiv.
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Tougher rhetoric from Burnham
While Sir Keir Starmer was a steadfast supporter of Ukraine, Burnham’s comments will be seen as more outspoken. They come as the perceived threat from Moscow has increased in the last few months.
With UK-made drones being used against Russia by Ukraine, Tobias Ellwood, a former defence minister, said Britain “should brace [itself] for grey zone retaliation. And for this we are woefully unprepared”.
Increased assistance
Britain has been contributing to Kyiv’s war effort since the start of the Russian invasion, but the revelation that UK-made drones were being used to strike Russia, as well as that Britain has shared blueprints for long-range missiles, reach a new scale of significance.
- Downing Street would not say whether this was a Starmer or Burnham policy, but a No 10 spokeswoman said the UK would continue to help arm Ukraine.
New battlefield data partnership
The latest support, announced on Monday evening, comes in the form of a new partnership between London and Kyiv on AI.
Under the deal, the UK will have access to Ukraine’s Avengers AI Labs database to develop tools for use on the battlefield.
Britain described the platform as a “goldmine of battlefield data”. In return, the UK will offer scientists and tech companies access to develop new battlefield tools.
Sorties by RAF planes
On Monday, an RAF “Rivet Joint” surveillance aircraft was spotted by military observers over Lithuania and northern Poland, near to the Russian enclave of Kaliningrad.
While sorties such as these are not unusual, the timing of the mission – reported by the X account OSINT Defender – could suggest the UK is gearing up for potential retaliation from Moscow for its support for Ukraine.
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How much caffeine is in your favourite cup of high street coffee?
Coffees from high street chains can vary “wildly” in the amount of caffeine they contain, a new study by Which? has shown.
Costa tops caffeine leaderboards
The research found that a medium cappuccino from Costa contains 325mg of caffeine, almost three-and-a-half times that of the same drink at Starbucks, at 89mg.
This caffeine content is around the same amount as four cans of Red Bull. Costa also has the most caffeine in its espresso shots – 100mg per serving – and its flat whites (241mg).
Where the other chains stand
Greggs is second in the caffeine standings, with 235mg in its cappuccino and Caffe Nero third, with 221mg.
Starbucks serves the least amount of caffeine across all its drinks, but levels have increased in its espressos, cappuccinos and filter coffees over three years.
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The areas included in first wave of new housing fund
In an interview with The i Paper, Housing Secretary Angela Rayner has said the Government is “tilting” towards council and social housebuilding in a bid to reduce the number of homeless families in expensive temporary accommodation.
A surge in social housing
A total of £10bn worth of funding is going to councils and housing associations to build more than 70,000 homes across England, 60 per cent of which must be social housing, according to Rayner.
- The £10bn announced yesterday is set to be followed by approximately £21bn for council and social housing, which has not yet been allocated.
The areas receiving the funds
Of the £10bn, the following mayoral authorities will receive:
- An additional 33 “strategic partners” that will receive the rest of the money will be announced in due course, the Government said.
- The Mayor of London, Sir Sadiq Khan, will be given £6bn to spend.
‘Changing order of queue’ will not solve social housing issue
Reform UK has pledged to prioritise British-born workers under 35 when allocating social housing if the party enters government, but charities and experts have warned that “changing the order of the queue” would not solve the issue of social housing.
Plug-in solar panels go on sale this week – what to know
Plug-in solar panel kits are set to go on sale in the UK this Thursday, just in time for the end of the sunny weather.
Here’s where you’ll be able to buy them later this week – and what to look out for.
What solar panel can I buy?
UKSOL is the first company to produce a plug-in solar panel meeting new regulations.
Its one-panel solar kit is on sale now from £699 for collection on 27 August.
It is not expected to hit supermarket shelves before the end of the summer, though.
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Will they get cheaper?
There had been speculation that a solar panel could cost as little as £400, and there is hope that prices could come down if plug-in solar becomes popular here.
Retailers such as Lidl, Asda, B&Q, Currys, Screwfix and Wickes have all expressed interest in solar kits.
How will they work?
- UKSOL’s single panel system includes a kit to set up the panel.
- It is then monitored via an app.
- It must be set up in a garden – not on a balcony.
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What to watch out for
Making your money back
With an estimated saving of £85 a year you’ll have to wait a while.
Safety first
Get your wiring checked to avoid starting fires from power surges.
No storage
You have to be in to use the electricity, or it will go to waste.
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Millions of women to get at-home cervical screening tests
From Tuesday, women who have not attended their cervical screening appointments will get free at-home testing kits on the NHS.
The move has been described as a “gamechanger”.
The NHS aims to eliminate cervical cancer by 2040.
Women can request kits online
Eligible women aged between 30 and 65 will be sent invitations to order an at-home swab kit if they have not attended a smear test.
The kits contain a swab, to be used to collect a sample from the vagina, which can then be posted to a lab for testing.
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How will it work?
- Samples will be tested for high-risk human papillomavirus (HPV).
- If a test is positive, the patient will be invited to an appointment.
- 13 types of HPV are responsible for 99.7% cervical cancers.
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More science from The i Paper
King Charles 10p coins enter circulation – but will you get one?
More than seven million coins bearing the King’s face are to enter circulation for the first time today, in response to rising demand for the 10p coin.
Fourth coin to bear Charles’s face
The new coins will join the 5p, 50p and £1 featuring the King’s portrait that are already in circulation. But these represent just 1 per cent of the 24,142 billion coins in use, so the new 10p will be rare.
The “tails” side will feature the capercaillie – an endangered bird found in the Highlands – reflecting the King’s passion for conservation.
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Capercaillie’s significance
We hope that by putting
Rebecca Morgan, director, Royal Mint
this extraordinary bird into millions of pockets and purses, we can spark a nationwide conversation about a species at real risk
of vanishing from Britain forever.”
Watch more from The i Paper
It is not clear how much Burnham and his Chancellor John Healey might have to raise on 28 October.
The Government will have to find at least £4.7bn to cover a gap left by former chancellor Rachel Reeves in funding the Defence Investment Plan. Healey resigned as defence secretary from Sir Keir Starmer’s cabinet – pushing Starmer closer to the exit – over what he said was an inadequate defence plan.
Burnham has already announced a number of cost of living measures – such as removing VAT from electricity bills and cutting the cost of bus fares – and is promising more. These commitments will have to be paid for.
At the same time, Healey’s fiscal headroom – the breathing space which the Government gives itself against its own fiscal rules constraining borrowing – is likely to have shrunk from the £22bn left by Reeves in her final Budget as a result of the ongoing economic impact of the Iran war.
So what are Burnham’s options?
Raising income tax, national insurance or VAT
The biggest revenue raising levers which Healey has at his disposal relate to income tax, national insurance and VAT, which make up 54 per cent of the tax base.
However, Labour’s 2024 general election manifesto committed not to raise any of these taxes, and Burnham has repeatedly said he will stick to the commitment.
Going back on the manifesto – and his own word – would be extremely damaging for a Prime Minister who has made much about restoring trust in politics.
Political risk rating: 4/5. Having ruled it out, it seems inconceivable that Burnham would U-turn on the commitment by the 28 October Budget – unless there was some major economic shock which meant all bets were off.
One of the more likely options would be to raise capital gains tax (CGT), which currently sits at 18 per cent for basic-rate income taxpayers and 24 per cent for higher and additional-rate taxpayers. CGT is levied on gains made when an asset – like equity in a company or a second home – is sold.
Raising the tax is popular in the Labour Party. It has previously been backed by Burnham’s second-in-command, First Secretary of State Louise Haigh and the Defence Secretary Wes Streeting – albeit both before their roles in Burnham’s Cabinet were confirmed.
Streeting has called equalising CGT with the income tax rates of 20, 40 and 45 per cent a “wealth tax that works”, and the idea is also supported by former Labour leader Lord Neil Kinnock, who Burnham has identified as a mentor.
How much money CGT equalisation would raise is fiercely contested. The Institute for Public Policy Research think-tank has claimed it could raise £14bn a year, but sceptics suggest it could actually end up costing the Treasury money if people delayed asset sales or moved overseas.
Nimesh Shah, chief executive of tax firm Blick Rothenberg, said: “Even if full alignment is considered a step too far, the Government may narrow the gap by increasing CGT rates – to say 30 per cent – reducing reliefs or tightening exemptions.”
Political risk rating: 2/5. As well as being popular on the left, CGT is paid by a relatively small number of people, with just 32,000 taxpayers accounting for 80 per cent of CGT payments. As tax rises go, it would not be particularly politically painful, although Burnham’s opponents would accuse him of being anti-entrepreneurial.
Wealth tax
Burnham has faced calls from figures on the left to introduce some sort of wealth tax.
Last month, former footballer and broadcaster Gary Lineker was among 120 so-called “Patriotic Millionaires” who signed a letter backing paying more tax in the form of a 2 per cent levy on wealth over £10m.
Economists and academics at the Paris School of Economics and King’s College London claim that such a tax could raise £10bn a year for the Exchequer and affect only the 1,000 most affluent households.
However, sceptics such as tax expert Dan Neidle have said that the policy would be highly vulnerable to a small number of wealthy individuals ceasing to be UK tax residents or “gaming” the valuation of their assets. Carrying out regular valuations would also be extremely complicated. Neidle said last month: “The problems with the wealth tax are serious. That’s why no country in the world has ever implemented a tax like the one proposed.”
Political risk rating: 2/5. Polling suggests that a wealth tax along the lines of the “Patriotic Millionaires” would be popular. The more important issue is that it could be unworkable.
Pension tax changes
There has been persistent speculation that the Government could cut the size of the tax-free lump sum people can take from their pensions, which is either 25 per cent of the amount or £268,275 – whichever is lower.
Another option would be to limit pension tax relief. If you pay into a pension, you receive relief at whatever income tax rate you pay, so higher rate payers get more generous tax relief.
Political risk rating: 3/5. Tax changes adversely affecting older people would be a bold step. There is a reason why the state pension triple lock has appeared almost impervious to reform, and why Sir Keir Starmer’s decision to cut winter fuel payments provoked a hugely damaging backlash: older people vote.
Sin taxes
Burnham could target business sectors or activities which he thinks are “anti-social” or damaging for people.
The Prime Minister has already signalled a shift in this direction, saying that the 20 per cent business rates cut for pubs, clubs, and small live music venues will be funded by reducing reliefs for stores perceived as causing social harm – specifically vape shops and betting establishments.
Healey could also raise taxes on cigarettes, vapes, unhealthy food and alcohol – though on the latter, the tendency in recent years has been for politicians to trumpet tiny price cuts on the cost of pints in pubs. Capital Economics has suggested that sin taxes could raise £1bn.
Political risk rating: 1/5. With the exception of alcohol, sin taxes incur little political cost. The bigger problem with them is that they tend to raise trivial sums.