![Burnham Backtracks on Proposals to Raise Personal Tax Allowance</TITLE]Andy Burnham has distanced himself from previous remarks regarding an increase to the tax-free personal allowance.The current £12,570 threshold has remained frozen since 2021, effectively pulling more taxpayers into the system as wages rise.Speaking to the Times over the weekend, Burnham noted that the “frustration about the personal allowance” expressed by constituents during the Makerfield by-election campaign had remained “lodged in my mind.”On Monday, the Prime Minister informed reporters that the matter would be reviewed during the upcoming budget, though he acknowledged that any adjustments would be costly and “difficult given the financial circumstances in which we find ourselves.”Sources close to Burnham have since clarified to BBC News that adjusting the personal allowance was not a core component of his initial cost-of-living strategy.This clarification follows comments made during Burnham’s first cabinet meeting, where he emphasized the need for “fiscal discipline” and a commitment to upholding fiscal rules, even if it requires “difficult decisions.”Burnham remains committed to the 2024 Labour manifesto, which pledges not to raise the basic, higher, or additional income tax rates. This commitment effectively precludes raising the top tax rate for high earners to fund a higher personal allowance.The Institute for Fiscal Studies estimates that unfreezing the current threshold could result in an annual cost of between £8.5bn and £9bn.Burnham remarked on Monday that his earlier comments were intended to demonstrate “visibility of the issue and the impact it’s had.”While he reiterated that the issue would be “looked at” in the Budget, he concluded: “Obviously it’s difficult, given the financial circumstances in which we find ourselves.”](https://i2.wp.com/ichef.bbci.co.uk/ace/branded_news/1200/cpsprodpb/c0f0/live/aef0e940-855e-11f1-bee8-53ce494e1abc.jpg?w=1024&resize=1024,1024&ssl=1 "Burnham Backtracks on Proposals to Raise Personal Tax Allowance</TITLE]Andy Burnham has distanced himself from previous remarks regarding an increase to the tax-free personal allowance.The current £12,570 threshold has remained frozen since 2021, effectively pulling more taxpayers into the system as wages rise.Speaking to the Times over the weekend, Burnham noted that the “frustration about the personal allowance” expressed by constituents during the Makerfield by-election campaign had remained “lodged in my mind.”On Monday, the Prime Minister informed reporters that the matter would be reviewed during the upcoming budget, though he acknowledged that any adjustments would be costly and “difficult given the financial circumstances in which we find ourselves.”Sources close to Burnham have since clarified to BBC News that adjusting the personal allowance was not a core component of his initial cost-of-living strategy.This clarification follows comments made during Burnham’s first cabinet meeting, where he emphasized the need for “fiscal discipline” and a commitment to upholding fiscal rules, even if it requires “difficult decisions.”Burnham remains committed to the 2024 Labour manifesto, which pledges not to raise the basic, higher, or additional income tax rates. This commitment effectively precludes raising the top tax rate for high earners to fund a higher personal allowance.The Institute for Fiscal Studies estimates that unfreezing the current threshold could result in an annual cost of between £8.5bn and £9bn.Burnham remarked on Monday that his earlier comments were intended to demonstrate “visibility of the issue and the impact it’s had.”While he reiterated that the issue would be “looked at” in the Budget, he concluded: “Obviously it’s difficult, given the financial circumstances in which we find ourselves.”")
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