Burnham proposed increasing the tax-free personal allowance

Andy Burnham has backed away from proposals to increase the tax-free personal allowance.

The £12,570 threshold is blocked from 2021, meaning more people are being dragged into paying tax as incomes rise.

Burnham told The Times at the weekend that the “personal allowance frustration” he heard while campaigning in the Makersfield by-election “got on my mind”.

The prime minister told reporters on Monday that “all this will be seen in the next budget” but admitted that any change would be expensive and “difficult given the financial situation we find ourselves in”.

Those close to Burnham have since told the BBC that any changes to the personal allowance are not part of his original plan to tackle the cost of living.

It will come later Burnham addresses his first cabinet meeting.: “We have to show fiscal discipline. We have to show that our commitment to financial laws is real and we are ready to make tough decisions in this regard.”

Burnham has pledged in Labour’s 2024 manifesto to not raise basic, top or additional income tax rates.

This would avoid raising the higher rate of income tax paid by high earners to offset the cost of raising the personal allowance.

The Institute for Fiscal Studies estimates that tackling the threshold could cost £8.5-9bn a year.

“It’s showing me the visibility of the issue and the impact it’s had,” Burnham said Monday.

He told reporters that “it will be seen” in the budget, but “it is difficult given the financial situation in which we find ourselves.”

Government sources told The Telegraph on Tuesday that there were no plans to announce any changes to the £12,570 personal allowance “in the short term”.