Andy Burnham has won public support for a series of popular but relatively low-cost announcements. Photograph: Jon Super/AP View image in fullscreen Andy Burnham has won public support for a series of popular but relatively low-cost announcements. Photograph: Jon Super/AP Andy Burnham Explainer From welfare to prisons: the challenges for Burnham when MPs return to Commons PM’s honeymoon period will come to an end as he makes decisions on the budget, welfare, migration and prisons
Prefer the Guardian on Google Andy Burnham has enjoyed a month-long honeymoon period since he became prime minister, winning public support with a series of popular but relatively low-cost announcements. They have included cutting VAT on electricity bills , reducing the cost of bus travel and reviewing business rates for small businesses.
But as MPs prepare to return to the Commons in just over a week, the prime minister is about to face his first real challenge in office, as he makes a number of key decisions that could create enemies but define his premiership.
John Healey gives his first budget as chancellor on 28 October penned in by the same constraints that faced his predecessor, Rachel Reeves.
Burnham and Healey have promised to stick to the fiscal rules set by Reeves, which means the government’s day-to-day budget must be forecast to be balanced in three years’ time.
They have also promised not to raise income tax, national insurance or VAT, which gives the chancellor little room for manoeuvre if he wants to raise money for potentially expensive policies such as bringing utilities under public control.
Many Labour MPs want Healey to raise wealth or business taxes to help pay for the government’s promises, but Treasury officials say such a move will not raise large amounts of money.
The economists Jim O’Neill and Andy Haldane, both of whom have advised Burnham in the past, have recently warned against raising taxes on the private sector. O’Neill said this weekend: “We need more genuine risk-taking and more entrepreneurs, and we need to boost these sort of green shoots of growth that are there.”
Over the next few weeks, the prime minister will be presented with two significant reports into how the welfare system is working: one on disability benefits by the minister Stephen Timms, and another on youth employment by the former minister Alan Milburn.
In his interim report, Timms said the current system of personal independence payments (Pip) was not working, but admitted that there would have to be some “challenging discussions” on how to fix it.
Keir Starmer’s attempts to cut £5bn from the Pip system backfired when Labour MPs rebelled en masse , forcing the government to drop the plans altogether, in what was arguably the beginning of the end of Starmer’s premiership.
Charities are already gearing up to resist any attempt by Milburn and the government to cut benefits or place sanctions on young people who fail to find work.
Shabana Mahmood, the home secretary, wants to make migrants wait longer before they are eligible for settled status, which allows them to claim benefits and access NHS services.
Controversially among Labour MPs, she wants to apply these changes to people who are already in the country, alongside a series of other changes to the migration system, including forcibly deporting families who refuse to comply with removal orders.
Mahmood has been consulting on some of her proposals, and has suggested that some people could be gi…