Andy Burnham implores cabinet to examine ‘all possible ways’ to tackle cost of living crisis

Andy Burnham implores cabinet to examine cost of living solutions Wanderstayfinder.com – Andy Burnham implores cabinet to examine "all possible ways" to

Andy Burnham implores cabinet to examine cost of living solutions

Wanderstayfinder.com – Andy Burnham implores cabinet to examine “all possible ways” to address the cost of living crisis as he faces mounting pressure to explain how he will fund his policy pledges. On his first full day in power, the prime minister confronted questions about financing the removal of VAT from electricity bills and an expected defence spending uplift. This issue had previously led his new chancellor, John Healey, to resign as Keir Starmer’s defence secretary last month. The Guardian has also learned that Burnham plans to accelerate the timetable for implementing his promise to roll out a national care service, a move that could cost further money before the election.

Setting the government’s mission

Gathering his cabinet in Downing Street for the first time, the prime minister told ministers his administration would be a “cost of living government.” He added that his priority would be to make life cheaper for voters, albeit within existing borrowing rules. “What can we do just to take that little bit of pressure off people’s shoulders, just to give them that little extra sense that help is coming so that they can have that bit of hope that things are getting better?” he asked colleagues. “And that’s the mission that we’ve got to set ourselves together.” He asked his colleagues to look into what their department could do to ease cost of living pressures, both “big and small.”

“We need to be a cost of living government, getting that cost of living down, looking at all possible ways of doing that.” Burnham began that process on Tuesday morning with an announcement that VAT would be removed from electricity bills from 1 October, reducing the electricity price cap by £45 at a total cost of £850m next year. The move came alongside major changes to Whitehall, which will see the creation of a new powerful Office for the Prime Minister and the Cabinet and hand responsibility for the UK’s growth strategy to the new No 10 North, which will be overseen by Louise Haigh, Burnham’s de facto deputy prime minister. Burnham’s promise to pay for the VAT cut by scrapping the government’s digital ID scheme was immediately called into question, however, by Darren Jones, the minister in charge of the policy until recently, who said the money for that scheme had not yet been identified.

“The DigitalID program was unfunded,” he posted on X on Tuesday. “The government will have to set out how it will pay for its new policies at the budget.” Downing Street said on Tuesday that the tax cut was funded for the next financial year, but money would have to be found in future years from existing departmental budgets, suggesting spending cuts to come. The intervention from Jones came amid wider disquiet among allies of Starmer over Burnham’s pledge to end factional infighting, after more than half of the outgoing prime minister’s cabinet were removed or demoted in Monday’s reshuffle.

One outgoing official said: “It’s less a purge of Starmerites than getting rid of people who were loyal to a Labour leader, while promoting people who were serially disloyal. That’s a dangerous message to send your MPs.” Healey is looking at longer-term plans to cut the cost of living as part of a budget to be delivered later this year. A spokesperson for the prime minister added he had also ruled out using higher borrowing to pay for defence spending – something previously advocated within government by Healey.

“It is not something we’re looking at,” they said.

Sources have told the Guardian Burnham is now working on a major social care announcement in the coming weeks as he looks to begin laying the groundwork for a social care service before the election. This would involve bringing forward the review into social care by Louise Casey, who is due to report by 2028, but is now likely to do so as soon as next year.

Those consulted on the policy say Burnham will give Casey scope to work up a range of options, including a new national service funded by taxes or a social insurance model that could see social care costs capped for a limited period of time. They admit, however, that any funding model is likely to trigger a political backlash with previous proposals having been abandoned amid a storm of controversy about the prospects of a new “death tax” being used to pay for them. Burnham told reporters this week: “I am ready to use some of my political capital on this issue … I would not want to leave office having done what Westminster has done, not just for 15 years actually, I think you’re getting close to 30 years.”

“It’s not defensible. How many people have lost their homes and their savings in that time? We need to face it and fix it.” A spokesperson said the announcement would come “in due course.”