New prime minister Andy Burnham has been warned that his flurry of cost-of-living policies since taking office this week will require significant tax rises to fund. Economists cautioned that Chancellor John Healey may need to deliver a "revenue-raising" Budget to cover the pledges, which include a 20 per cent business rate cut for pubs, clubs and live music venues, a VAT cut on electricity bills and a £2 cap on single bus fares from January. The intervention piles pressure on the new administration just days into Burnham's premiership, with critics questioning whether the promises are properly costed.

The business rate cuts alone are expected to cost around £100m a year, with no clear funding source specified. James Smith of the Resolution Foundation and Stephen Millard of the National Institute of Economic and Social Research both said taxes would likely need to rise to meet the commitments. Adding to the scrutiny, sacked minister Darren Jones revealed the Digital ID scheme intended to fund the energy VAT cut was itself unfunded, while Conservative shadow chancellor Sir Mel Stride and shadow business secretary Andrew Griffith accused the government of failing to explain where the money would come from.