Alex Wickham@alexwickham
BREAKING: Andy Burnham says he’ll look at using what he calls “flexibility” within the existing fiscal rules to help fund his policies at the budget.
“I’ve said we’ll stick to the fiscal rules, and by that I mean the existing fiscal rules, and use obviously any flexibility within them,” Burnham told reporters shortly after becoming PM this afternoon, when asked about the possibility of increasing borrowing to pay for greater investment in infrastructure.
“We will stick to the existing rules and I’ve made that very clear in Downing Street. So none of this is about taking risks with the economy. I’ve never done that in any role that I’ve had,” he added, in an attempt to reassure investors he would not be reckless with the public finances.
“I’ve always taken a very prudent approach,” he said, pledging to “show how it will be funded and that will be clearly set out in our budget.”
The Resolution Foundation think tank has argued it’s possible to borrow more by expanding the remit of so-called public financial institutions such as the National Wealth Fund. Extra borrowing by these institutions falls outside the government’s self-imposed debt rule which requires public debt to fall as a proportion of domestic output by the end of the parliament. Such a change would still require extra government borrowing.
Burnham also said he’s considering raising the tax-free personal tax allowance above £12,750, though he conceded that would be expensive.
“I think it’s been frozen now, hasn’t it, for a number of years, so it has dragged more people in — pensioners, I think — and that particularly I think has become a growing issue. So all of this will be looked at though at the budget, and obviously it’s difficult given the financial circumstances in which we find ourselves,” he told reporters.
“It’s an issue that I’m just kind of showing I have a visibility of the issue and the impact it’s had on the different groups that I’ve mentioned, but it’s difficult because changing the threshold is not without significant consequences. But I’m looking at it,” he said.
He indicated he isn’t looking at raising the top rate of income tax, despite previously proposing a hike. “I think that would just be premature to say that,” he said.
Burnham pledged that he would not leave office without reforming social care, another potentially expensive policy.
“I am ready to use some of my political capital on this issue. I’ll be blunt with you. I would not want to leave office having done what Westminster has done, not just not just for 15 years actually, I think you’re getting close to 30 years when the Royal Commission. It’s not defensible. How many people have lost their homes and their savings in that time? We need to face it and fix it,” he said.