Prime Minister Andy Burnham is shown the driver's area on a FirstGroup bus during a visit to a bus station in Bath on July 22. Photo: Reuters

The Prime Minister has made major announcements in his first days as PM. After announcing his intention to end rough sleeping, yesterday, in his first major policy since entering Downing Street, Mr Burnham said that VAT will be removed from domestic electricity bills from October 1.

And today, Number 10 announced that single bus fares across England will be capped at £2 from January. Speaking to reporters in Bath today, the Makerfield MP said he has “reprioritised” how money is being spent in Government, to try to ease the cost of living.

He cited his decision to scrap the digital ID scheme as one of the places where funding was being reprioritised, saying he is “taking a difficult look at some of the things that the Government was committed to.”

The cost of the project was not confirmed at the time by Labour but the Office for Budget Responsibility later clarified that the original scheme could have totalled £1.8bn over three years. The axing of the scheme proposed by the Starmer government has been pitched by the in-coming administration as part of its central effort to shift resources 'towards people's everyday priorities'.

'No commitment' to raise tax allowance

Mr Burnham did, however, refuse to commit to change the income tax personal allowance. The former Greater Manchester mayor told reporters that he would look at the allowance at the budget, but that there was “no commitment” and “no unfunded promise”.

After rumours emerged that he could be looking at plans to raise the £12,570 threshold following comments he made in an interview with the Times, the Prime Minister said today: “Well, it’s funny these days you can’t answer a question honestly without then people reading everything else into it."

He added: “I want to answer questions honestly in this job, as I said before. I think that’s all about trust in politics and doing politics differently, and I’m determined to keep keep working in that way. It was raised a lot, but I then went on to say, ‘But we’ll have to look at it at the budget alongside everything else’. So no commitment, no unfunded promise.

“It’s just perhaps the way politics is these days and the way people report things, but that was an honest answer. There is no commitment at this point to change, but we will look at that at the budget.”

Asked if tax rises were likely at the budget this year to pay for his cost of living policy blitz, including his £2 bus fare cap, Mr Burnham replied: “No, we’ll take decisions on tax at the budget. This is about reprioritising in this phase. As I say, going to the public’s priorities, the cost-of-living crisis, the housing crisis.

“How much longer are we going to talk about these things without actually doing something to help people? And already in the space of a few days, I’ve made a number of moves that will deal with some of these challenges, although I appreciate there’s a lot more to do.”

Mr Burnham was also asked whether he would “be honest with the public” that some of his pledges might come with more borrowing or tax rises. The Labour Prime Minister told broadcasters: “I will always be honest with the public – that’s my style.”

Bus fare cap among 3 major policies

The discussions around cost of living crisis follows the latest policy announcement from Number 10 this morning, which stated the government will cap bus fares at £2, as he has done in Greater Manchester. The nationwide cap is currently set at £3 until the end of March 2027 although some areas – including London and Greater Manchester, where Mr Burnham set a £2 limit as mayor – have lower top rates for single tickets.

He said: “This week, the three policies I’ve announced – ending rough sleeping, the bus cap we’re announcing today and the removal of VAT off electricity bills – are all fully funded, and that’s the way I will go."

“Good, affordable transport links are an essential," he added. "No one should be priced out of those and left behind. But for too long people have said that cheaper transport isn’t an option. I don’t accept that. I’ve done it before and I will do it again now: a £2 cap on bus fares for millions across the country.”

However, the PM has come under question about the cap, with some suggesting that he is “bringing back Boris Johnson’s policy". Mr Burnham has insisted that the policy was his originally.