Andy Burnham’s flagship VAT cut on household energy bills is already leaving him with a sizeable hole to plug at the Budget. Around £850 million…
Burnham is banking on a 0.1% inflation reduction from the VAT cut to ease pressure on cost of living (inflation fell more than expected this morning, but economists expect it to significantly worsen in the second half of the year). If bringing down inflation is a key government priority, there’s another tax cut sitting under his nose that comes without the eye-watering bill…
From 1 October, the Treasury is set to press ahead with another tobacco duty hike. Its own figures show the one-off £2.20 increase per 100 cigarettes and 50g of rolling tobacco is expected to raise just £80 million in 2026-27. Analysis seen by Guido suggests ditching this tobacco tax could reduce inflation by around 0.07%. A cheaper and better way to cool inflation, without burning a hole in the Treasury’s coffers…
Instead, Burnham has gone for the headline-grabbing announcement and the hefty price tag. Another costly pledge piling up in Burnham’s Budget black hole…
Tom Baldwin, author of Starmer’s hagiography, spoke to Times Radio:
Tom Baldwin: “I think he’d like to do something. He’s very dutiful and driven by service. That’s why he came into politics. I think that’s characterised his time as prime minister. He hasn’t always sought popularity or been good at being popular. But I think he has some of the necessary qualities that we actually do want in a prime minister. That resilience, that relentlessness, that ability to carry the weight and the job really does weigh very heavily on people and he carries that weight very, very well.”
Jo Coburn: “NATO Secretary-General?”
Tom Baldwin: “I think that’s something that he would be interested in. I think it probably requires Andy Burnham’s government to support him in that and these are some of the questions which Andy Burnham has to resolve quite quickly.”