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New PM… same old Labour U-turns! Bungling Burnham drops push to end hated freeze on tax thresholds – but borrows £450m to cap bus fares at £2
Andy Burnham, in his early days as Prime Minister, has scrapped a Labour pledge to end the freeze on income tax thresholds, in what critics are calling the latest in a series of policy reversals since he took office. The move is politically significant as it means more workers will continue to be dragged into higher tax bands through fiscal drag, even as the government commits fresh borrowing to fund a flagship transport pledge, raising questions about the coherence and cost of the new administration's early spending decisions.
At the same time, Burnham has pressed ahead with a plan to cap bus fares at £2, funded through £450 million of additional government borrowing. Opponents have seized on the contrast between abandoning the tax threshold commitment and taking on new debt for the fares policy, framing it as evidence of an uncosted and inconsistent approach in the government's first days, with further criticism reportedly emerging from within Labour's own ranks.
In short
- Burnham drops pledge to end frozen tax thresholds as PM
- Government borrows £450m to cap bus fares at £2
- Critics call it an early U-turn and uncosted policymaking
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters of the decision argue that with a fixed and limited fiscal envelope, targeted, immediate relief such as a £2 bus fare cap does more to help lower-income and younger people who rely on public transport daily, compared with raising the personal allowance, whose benefits are spread thinly across all taxpayers including higher earners. They contend that borrowing £450m for a popular, visible measure is a reasonable trade-off when the alternative, unfreezing thresholds, would cost far more and disproportionately benefit those who already pay significant tax, so prioritising affordability of everyday travel reflects sound judgement about where public money delivers the most social benefit per pound spent.
The case against
Critics argue this is a broken promise dressed up as a spending win, since Burnham twice signalled he wanted to end the threshold freeze that drags millions of low and middle earners into higher tax bands through fiscal drag, only to abandon that pledge while still finding £450m in fresh borrowing for a different priority. They see this as evidence of poor discipline and inconsistency in a new administration, arguing that if the money could be found for bus fares, it undermines the claim that thresholds could not also be addressed, and that repeatedly promising one thing and delivering another erodes public trust in the government's fiscal credibility and its willingness to ease the tax burden on ordinary working people.