PM admits more tax hikes could be on the table as he ‘delays plan to put Thames Water into administration’ over cost fears
Andy Burnham has signalled that further tax rises could feature in the Budget on 28 October, as he acknowledged the government is in a "challenging position" on public finances. Speaking during a visit to Ukraine, the PM said he would try to help struggling families "in whatever way I can" but would not be "unrealistic", while insisting he would stick to Labour's manifesto pledges not to raise income tax, VAT or national insurance. The remarks come alongside reports that plans to place Thames Water into a special administration regime have been delayed over concerns about the enormous cost involved.
Officials are reportedly worried that Thames Water, which serves 16 million customers, would require £2billion of funding in the coming year alone, with one Whitehall source describing the legal risks as significant. Downing Street maintains the administration option remains "on the table" but stressed it was never going to happen immediately. Burnham also ruled out calling a snap general election despite talk of a "Burnham bounce" in the polls, and reiterated his past support for a land value tax, an idea critics argue could hit London and the South East hardest.
- Burnham hints at possible tax rises ahead of the 28 October Budget
- Thames Water administration plan reportedly delayed over £2bn cost fears
- PM rules out calling a snap general election despite poll gains
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Andy Burnham is the UK Prime Minister, and his government faces two pressing problems this summer. One is the state of the public finances, with speculation growing that the Budget on 28 October could include fresh tax rises, even though Labour promised at the last election not to raise income tax, VAT or national insurance. The other is Thames Water, the country's largest water company, which supplies 16 million customers and has been struggling under a huge debt burden.
Special administration is a legal process the government can use to take over a failing essential-services company, similar to what happened with some energy suppliers during the 2021 energy crisis. It would let officials keep Thames Water running while restructuring its finances, but ministers are wary because it could cost billions of pounds in public money and carries legal risks. The two issues are connected because any rescue of Thames Water would add further strain to a budget already under pressure.
Burnham has also faced questions about his own political position, including whether he might call an early general election amid talk of rising personal popularity, and about his previously stated support for a land value tax, a policy that would tax landowners based on the value of their land rather than income or spending.
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The case for
Supporters of the government's approach argue that Andy Burnham is being commendably honest about a genuinely difficult fiscal inheritance, choosing candour over false promises while still ring-fencing the manifesto commitments that protect ordinary earners from higher income tax, VAT or national insurance. On Thames Water, they contend that ministers are right to pause before committing billions of pounds of public money to a special administration regime, since a hasty move could saddle taxpayers with enormous costs and legal risk for years to come, and keeping the option open rather than ruling it out shows prudent, considered governance rather than indecision.
The case against
Critics counter that repeatedly signalling further tax rises, even while avoiding the three protected taxes, erodes trust and squeezes households and businesses already under pressure through other levers such as council tax, capital gains or a land value tax that could hit London and the South East disproportionately hard. On Thames Water, sceptics argue that delaying administration over cost fears simply defers an inevitable reckoning at greater eventual expense, leaving sixteen million customers dependent on a financially fragile provider and suggesting the government is more concerned with managing the Treasury's balance sheet in the short term than confronting a failing utility decisively.