The Prime Minister is spending the month criss-crossing the UK, taking his Labour government on a carefully planned tour intended to rebuild trust with voters who have long since lost patience. Whether it will work is another matter entirely.
The roadshow comes after a series of moves by Andy Burnham aimed at presenting him as a leader who understands the pressure households are under. The message is clear: he wants to be seen as standing shoulder to shoulder with families facing a stubborn cost of living crisis. Yet that squeeze shows little sign of easing and could become even more painful as the year wears on and the country heads towards 2027.
Voters should be wary of the packaging. Burnham may strike a sympathetic tone, but critics argue his instincts point towards higher taxes to sustain Britain’s increasingly expensive welfare system. The mood music ahead of the October 28 Budget is already grim, and for working households — the strivers who make up the majority — it is unlikely to bring much comfort.
If expectations prove correct, the statement could rank alongside the two bruising Budgets delivered under Rachel Reeves, which many households and businesses are still feeling.
Andy Burnham may present himself as a charming man of the people, but that certainly won’t be enough to fix Britain’s cost of living crisis
To be fair, there is value in a Prime Minister leaving Westminster and speaking directly to the public. His predecessor was widely seen as ineffective on that front. Burnham also has flashes of the easy political charisma that helped Tony Blair sweep Labour into power in 1997.
But charm, however polished, has limits. Styling himself as a man of the people may help him connect with audiences, but it will not, on its own, solve the economic pressures weighing on the country.
The cost of living crisis remains the central challenge. Inflation is currently at 2.6 per cent and is forecast to climb to 4.3 per cent in the first quarter of next year. Investment platform AJ Bell says inflation has pushed prices up by 28 per cent over the past five years, leaving millions of households still struggling to make their money stretch.
Nor will a simpering Burnham reignite an economy that grew by a paltry 0.4 per cent in the second quarter of this year and is now forecast to grow next year by an anaemic 0.3 per cent. To put this figure into perspective, it compares with the previous 1.6 per cent growth forecast from the Office for Budget Responsibility.
You don’t need to be an economist to realise the economy is stuck in a rut, strangled by rules and regulations (many introduced by Labour) that are anti-business and anti-growth.
The economy will only grow if businesses are liberated from the yoke put around their necks by this Government, writes Jeff Prestridge. (Pictured: Burnham visiting a farm in Cornwall)
Chancellor John Healey talks of driving ‘growth in every postcode’, but it is likely that energy bills will remain high and more tax rises will come our way, our money editor warns
Talk of driving ‘growth in every postcode’ – Chancellor John Healey’s response last Thursday to the disappointing second quarter growth figures – is no more than the soundbite of a fantasist.
The economy will only grow if businesses are liberated from the yoke put around their necks by this Government – and consumers see less of their hard earned income and savings disappear in pernicious taxes. None of the measures that Burnham has announced so far to tackle the cost of living will significantly ease pressure on household budgets.
The announcements – including a lower cap on single bus fares in England from next year and a temporary suspension of VAT on electricity bills from October – are more headline-grabbing than meaningful.
Some, such as a possible clampdown on ‘misleading’ supermarket discounts, defy logic. This country’s supermarkets are super competitive and don’t need Labour telling them how they should run their businesses.
Maybe the meaningful stuff is being kept back for Healey’s inaugural Budget, but I doubt it. This Government is too boxed in by ideology to do what is necessary to tackle the cost of living crisis head on and get the economy growing.
As a result, energy bills will remain prohibitively high for both businesses and households – while companies will continue to shed workers rather than invest in the UK economy. As for the Government’s failure – or unwillingness – to get a grip on welfare spending, it will continue to spook financial markets and keep borrowing costs high, much to the dismay of many homeowners.
All this leads me to one conclusion which won’t make for easy reading (maybe it’s time to take a break and grab a wee whisky before you read on).
Yet more tax rises are coming our way, especially if you are a high earner or have investment wealth sitting outside the tax shield of an Isa or pension. It’s time to see if you can protect your household’s wealth before Healey hits your finances for six.
So, I urge you to use your Isa and pension allowances – and transfer assets between family members so that collective taxes are kept to a minimum.
It’s an issue myself and my colleagues on Wealth & Personal Finance will be returning to between now and October 28. Unlike Labour, we bat for YOU.
