All the cost-of-living policies announced by Andy Burnham in his first week as PM – and what they mean for YOUR wallet

ANDY Burnham has kicked off his first week in power by announcing a raft of new policies aimed at helping households cut their bills. After taking the reins from Keir Starmer, the new Prime Minister told his Cabinet that they needed to be a “cost of living government”. Andy Burnham took the reins as Prime Minister on Monday and has announced several new cost-of-living policies Credit: Reuters Former defence secretary John Healey has been announced as Britain’s new Chancellor Credit: Getty From a £340million investment to end rough sleeping to a VAT cut on energy bills, a new Labour policy has been unveiled almost every day this week. But there are fears over how the Prime Minister and his new Chancellor, John Healey, plan to fund this spending spree. Sign up for the Money newsletter Thank you! The Tories are warning his commitments could cost close to £100billion and be paid for by tax hikes on working families in the next Budget. These are all the measures announced this week by Burnham in his first week of power – and what they could mean for your wallet. Energy bill VAT cut IN his first major move as PM, Burnham announced that he will cut VAT on energy bills from the autumn. From October 1, the 5% tax will be slashed from household bills, saving families £45 a year. However, the cash Burnham is pledging to save families through this move will likely be swallowed up by energy bill increases. The energy price cap is expected to soar to around £1,849 a year in October, according to analyst Cornwall Insight. Most read in Money The ongoing war between the US and Iran is also expected to push up prices due to disruption in global oil and gas markets. It rose by £221 to £1,862 a year from July 1 to September 30. Meanwhile, the VAT cut is only set to last six months, so it’s not a long-term solution to bring down household energy bills. Nevertheless, the measure is expected to cost Burnham’s Government around £850million, which he plans to fund through the cancellation of the Digital ID programme. £2 cap on bus fares As part of his cost-of-living package, the PM also announced this week that bus fares will be capped at £2 across England. The policy, set to come into force from January, lowers the current £3 cap which was introduced by Keir Starmer in 2024. It will apply across all of England, except in London, and will be in place throughout the whole of 2027. Burnham said the lower fares would “help people get where they need to” and give them “breathing space to help with the cost of living”. The scheme is expected to cost over £450million, and Burnham and his ministers have faced a grilling this week over where the money would come from. However, they have insisted the cap was fully funded and would not hit taxpayers. Cut in business rates for pubs In a boost for hospitality, it was announced that business rates would be cut by 20% for pubs, clubs and live music venues next year. It comes as a major win for The Sun’s Save our Sups campaign, which has been fighting for the struggling sector. The discount will apply to nearly 32,000 hospitality businesses and is expected to save a typical pub £1,100 a year. It will be rolled out across England from April, but it will not be available to the biggest live music venues. Pubs have been dealing with skyrocketing costs in recent years, and as a result nearly two pubs closed per day in the first three months of 2026. While pub owners and industry bodies have praised the cuts as “hugely welcome”, they likely won’t make any huge difference to punters. A £1,100 discount on business rates is unlikely to be passed on to customers in the form of cheaper prices on pints, food, or event tickets. However, experts say the relief could help prevent venue closures, and give under pressure venues some “much needed breathing space”. What else could Burnham announce? The new Prime Minister has signalled that even bigger spending is to come, with more policies set to be announced in the coming days. Next week, he will unveil major plans for overhauling Britain’s adult social care system, making it free for millions in an NHS-style shake-up. It’s a move that is projected to cost a huge £18.5billion a year. He has also promised to bring in the “biggest council-housebuilding programme since the post-war period” in another expensive move, but details of his plans are yet to be announced. Meanwhile, he is also eyeing up nationalising utility companies like Thames Water, which would take them back under public control. Comment now