Burnham ‘plans £38bn tax raid’

Andy Burnham is to launch a £38bn tax raid on the wealthy to fund a spending spree in office, analysis by Reform UK has found.

A report into the prime minister-in-waiting’s pledges found Mr Burnham would bring Labour’s total increase in taxation from around £66bn to more than £100bn a year.

This includes promises of a “care levy” of up to 10 per cent of the value of estates after death, reforming the rates of capital gains tax (CGT), and imposing National Insurance on landlords’ rental income.

Implementing a torrent of new taxes not mentioned in Labour’s 2024 manifesto will increase pressure on Mr Burnham to call an early election. He is due to be elected unopposed as Labour leader and prime minister on Friday.

Robert Jenrick, Reform’s economy spokesman, said: “Andy Burnham has spent 20 years reaching for other people’s money – a death tax on family homes, a graduate tax on young people getting their first pay cheque, a £14bn raid on savings and investment, and new levies on everything from your parking space at work to your weekend away.

“Taken together with Rachel Reeves’s record, Labour could well raise more than £100bn a year of tax rises. If Mr Burnham disputes this, the remedy is simple: rule these 10 taxes out, by name, today.”

The UK already has its highest tax burden on record, following raids by Rachel Reeves on employer National Insurance contributions, new VAT on private schools and a freeze to income tax thresholds.

Mr Burnham has declined to set out detailed tax plans ahead of his first Budget but has pledged to remain within Labour’s fiscal rules, which require debt to be falling as a percentage of GDP.

However, he is considering appointing Ed Miliband, the Energy Secretary, as his chancellor after taking office on July 20, despite Labour MPs urging him to appoint a less controversial and more centrist figure like Wes Streeting or Shabana Mahmood.

On top of this, Mr Burnham has hinted at a range of expensive spending plans that will require funding from taxation.

He has suggested he would support increasing the top rate of tax to 50 per cent for the highest earners, which would amount to a breach of Labour’s 2024 manifesto not to raise income tax.

He has also refused to rule out a range of tax changes, including aligning CGT with income tax, which he said earlier this month he would “want to look at”.

Mr Burnham is also considering lowering the threshold of Ms Reeves’s “mansion tax” on properties worth more than £2m to just £1.5m, which would drag many homeowners in London and the South East into higher rates of council tax.

A levy on landlords’ rental income would raise around £3bn a year, according to the Institute of Public Policy Research (IPPR), although economists have warned the policy would lead to a restriction in the housing supply and higher rents for tenants.

Other suggestions Mr Burnham has previously supported include a graduate tax to replace student loans, higher gambling duties, a workplace parking levy and greater powers for mayors to charge tourists for overnight stays.

In total, Reform said the policies would bring the tax increases from Sir Keir Starmer and Mr Burnham’s governments to £104bn, with £38bn of increases from the new administration alone.

A report by his allies at Mainstream, a Burnham-aligned think tank, has previously estimated that the policy would raise up to £14bn, although it would likely lead to wealthy taxpayers leaving the country.

City bosses and ultra-high-net-worth individuals have warned that a Left-wing Chancellor would reduce market confidence in his government, and could raise the cost of borrowing.

The Treasury already spends around 10 per cent of its total expenditure on debt interest, despite Ms Reeves’s attempt to reduce borrowing and win over the bond markets.

Lord O’Neill, a former Goldman Sachs chief economist who is advising Mr Burnham on economic policy, said on Sunday that his government would not “tax the hell out of you”.

He said in an interview with the Rest is Money podcast that Sir Keir had told the country: “Sorry, we’re going to tax the hell out of you. Life’s going to be miserable”, adding: “That is definitely not the nature of our probable incoming leader.”

Lord O’Neill also called on Mr Burnham to scrap the pensions triple lock, which Labour and the Conservatives have both pledged to keep.

He said the policy was “very unfair from an intergenerational perspective” and harmed “all these young people who can’t afford to buy or rent in some parts of the country being expected to pay more and more tax”.

[Source: Daily Telegraph]