Prime Minister Andy Burnham has indicated that further tax increases may be necessary as the government grapples with its public finances. These remarks come amid reports that a plan to place the debt-laden water company Thames Water into special administration has been delayed due to concerns over substantial costs.
During a visit to Ukraine, Burnham suggested a need for realism regarding the extent of financial assistance that can be provided to struggling families. His comments have fueled speculation about potential tax increases in the upcoming Budget on October 28. However, he reiterated the Labour Party's manifesto commitment not to raise income tax, VAT, or national insurance.
Pressure from within the party for wealth taxes has been mounting, despite economic concerns. Burnham has also previously supported a land value tax, which critics warn could negatively impact London and the South East.
Burnham denied plans for a snap general election, despite a reported positive shift in polling. He has expressed a preference for public ownership of the water system and considered a special administration regime (SAR) for Thames Water. This would ensure continuity of essential services while a buyer is sought for the company, which serves 16 million customers.
Officials have reportedly expressed concerns that Thames Water might require as much as £2 billion in funding within the next year. "It is very challenging and there are significant legal risks," a Whitehall source stated.
Downing Street has maintained that an SAR remains a possibility, emphasizing that the move was never intended to be immediate and that the situation is complex.
When questioned in Kyiv about whether the public must accept higher taxes for services like council housing and social care, Burnham replied, "No, they don't necessarily have to accept that." Addressing concerns about filling a defense budget gap with tax rises, he stated he would not risk people's jobs or livelihoods. "I will try to help them in whatever way I can... I will do what I can but I won't be unrealistic," he added. "We are in a challenging position. Whatever I do will be carefully thought through, it will be funded and there will be more to come as we go into the autumn."
In a separate interview with LBC, when asked if the public should anticipate tax increases in the October Budget, Burnham reiterated, "We have a manifesto, and I will honour that manifesto. I believe it's possible to provide extra help for people with the cost of living by changing some of our priorities." He expressed uncertainty about achieving all his goals but assured the public of his positive and unifying direction for the country.
Burnham explicitly ruled out calling an election.
