Andy Burnham has rejected proposals to increase tax-free personal allowances.
The £12,570 threshold has been frozen from 2021, leaving more people forced to pay tax as their income increases.
Over the weekend, Burnham told the Times that the “frustration about personal benefits” he heard while campaigning in the Makerfield by-election had “stayed in my mind”.
The prime minister then told reporters on Monday that “all of this will be taken into account” in the next budget, but admitted any changes would be costly and “difficult given the financial circumstances we find ourselves in”.
Those close to Burnham have since told BBC News that any changes to the personal allowance were not part of his original plan to tackle the cost of living issue.
This comes after Burnham said at his first cabinet meeting: “We must demonstrate fiscal discipline. We must show that our commitment to fiscal rules is real and we are willing to make difficult decisions about it.”
Burnham delivered on Labour’s 2024 manifesto, which included a pledge to not increase the basic, increased or additional rate of income tax.
This would remove the possibility of raising the top rate of income tax paid by people on higher incomes to offset the cost of raising the personal allowance.
The Institute for Fiscal Studies estimates that unfreezing the threshold could cost £8.5-9 billion a year.
Burnham said Monday that he “simply showed that I am aware of the problem and its impact.”
He told reporters the issue would be “looked at” in the budget, but added: “Obviously it’s difficult given the financial circumstances we’re in.”
Government sources told the Telegraph on Tuesday there are “no plans” to announce any changes to the £12,570 personal allowance “in the short term”.