Andy Burnham eyes energy guarantee, rent freeze and £2 bus cap

Andy Burnham, the former Manchester mayor who is due to take office as Britain’s prime minister next week, has framed the cost‑of‑living crisis as the first test of his incoming government. Speaking to LBC he said the administration must “be serious about putting more money back into people’s pockets”, a line that echoes the concerns voiced by former Labour minister Miatta Fahnbulleh in a recent BBC interview. The backdrop is a UK still coping with “inflation held at 3 per cent in May” while volatile oil markets have been jolted by renewed fighting in the Middle East.

Energy: an “essential guarantee” for basic heating

Energy‑bill relief dominates Burnham’s agenda. Ofgem’s energy price cap recently increased by £221 a year to £1,862 – the highest level in more than two years – largely triggered by spiking oil prices in the wake of the US-Iran conflict. The New Economics Foundation (NEF), which Ms Fahnbulleh led as chief executive from 2017 until her election in 2024, has urged the government to introduce an "essential energy guarantee" to ensure households' basic heating and power needs are met. This progressive pricing model would provide a free or heavily discounted tier of energy for basic household needs, offset by higher tariffs for additional consumption.

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“I think there’s a very strong case for some energy bill support being involved. It’s a live issue. The situation in the Middle East seems to be deteriorating by the hour, and that’s obviously bad news for fossil fuel prices.”

Dr Alex Chapman, head of economic and environmental policy, NEF, via The Independent

While Mr Burnham has signalled that he intends to increase public control over services like energy, water and transport in a bid to reduce costs over the course of the decade, immediate subsidies could remain an option to lower bills this winter.

Housing: rent rise concerns and a council‑building push

The landmark legislation brought in a slate of new protections for renters, notably including the removal of the controversial Section 21 ‘no fault’ eviction notices. And while it also created greater powers for tenants to challenge unfair rent rises at tribunal, the government stopped short of bringing in rules to control or freeze rents. Rental costs have continued to rise between 6 and 9 per cent every year in every region across England, recent research from the NEF found, outstripping wage growth for 11 of the past 15 years. Mr Burnham has not publicly committed to an immediate action on rental costs. However, in 2023, he co-signed an open letter to then-housing secretary Michael Gove to “introduce an immediate freeze on rents” in the wake of the Covid pandemic.

In recent months, the incoming prime minister has promised the “biggest council housebuilding programme since the postwar period” when he comes into power, a policy which – if successful – could be instrumental in bringing down housing costs in the longer-term. Burnham has also called for the entire 10-year £39bn affordable housing budget for England towards homes for social rent, the cheapest and most heavily subsidised form of publicly-funded housing.

Transport: a £2 bus‑fare cap and broader public control

Public transport forms a cornerstone of Mr Burnham’s vision for government. It has been reported that he is considering a £2 cap on bus fares across Britain, emulating the scheme put into place in Manchester. During a recent ‘ask me anything’ session on Reddit, Mr Burnham was asked if he would like to see free public transport for all. He responded:

“In an ideal world, I would like to cut the cost of public transport as low as possible. I have made it free for 16 to 18-year-olds and recently removed the 9.30am restriction on older and disabled people’s bus passes. I will try to keep the £2 capped bus fare for as long as I possibly can. Low cost or free public transport is, in my view, a brilliant way to get people back to work and connect communities.”

Burnham has said he wants all parts of the UK to take "greater public control" of the water and energy sectors. One area where he has advocated direct public ownership is Thames Water, a move that is already on the cards after government objected to a proposed rescue deal for the debt-laden company in June. The broader vision is a “rebalancing of power” that would shift authority from Whitehall to English regions, a plan he intends to anchor in a new No 10 unit based in Manchester. That unit would be tasked with promoting "equivalent living conditions" across Britain, borrowing from an idea in the German constitution.

Fiscal reality: the chancellor’s task

It will ultimately be the job of the new chancellor to find all the funding for the cost of living package that is likely to be announced, with the incumbent Rachel Reeves not expected to remain in the role. Further details can be expected from Monday, when Mr Burnham is set to formally take over and assemble his government.