Episode Details

Prime Minister Andy Burnham is eyeing a long-overdue tweak to the tax-free personal allowance—frozen since 2021—which could pull more workers into higher tax brackets as wages rise, a phenomenon known as fiscal drag. He’s also set to scrap VAT on energy bills starting October. Currently, you pay no tax until you earn £12,570; anything above that kicks in 20% tax. Experts warn even a modest £500 boost could cost the Treasury billions. Dan Neidle of Tax Policy Associates calls it a “bad tax cut,” noting it’d save basic rate taxpayers just £100 a year but cost £5 billion. He argues cutting National Insurance by just one penny would deliver £250 extra to the average worker annually—and cost the same—making it a smarter, more impactful way to reward hard work.

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