Andy Burnham Announces £1.5 Billion Cost of Living Package

Prime Minister Andy Burnham concluded his first week in office by announcing approximately £1.5 billion in spending initiatives designed to mitigate the cost of living. The package includes a £340 million program to end rough sleeping in England, a reduction of the bus fare cap to £2 beginning in January 2027, and a 20% business rates cut for pubs and live music venues starting April 2027.

As part of these measures, the government scrapped VAT on domestic electricity bills. However, the Office for Budget Responsibility noted that this £850 million measure remains unfunded, despite the cancellation of a previous digital ID scheme. In a move to decentralize government operations, Burnham established Heron House in Manchester as No 10 North, serving as a government situation room.

Burnham also took a cautious approach to domestic policy, pausing an early prison release scheme to conduct a safety review. He declined to implement immediate rent controls or the nationalization of Thames Water. Housing Secretary Angela Rayner explicitly ruled out rent freezes or controls, while Chancellor John Healey signaled a long-term goal to increase defense spending to 3% of GDP by 2030.