Key facts
- Andy Haldane is advising Prime Minister-to-be Andy Burnham on economic policies.
- Haldane advocates for significant tax reform, including replacing stamp duty and council tax.
- He also called for reform of the triple lock pension, deeming it "fiscally unsustainable."
- Haldane suggested the OBR should assess policy effects over a 10-year period.
- He praised Burnham's leadership in Greater Manchester, citing a "change in vibe" and economic acceleration.
Andy Haldane, president of the British Chambers of Commerce and former Bank of England chief economist, has urged the incoming Prime Minister Andy Burnham to pursue a radical economic agenda, including significant tax reforms and a "change in vibe" for Britain. Haldane, who is advising Burnham on economic policy, stated that "stability is not stasis" and that Burnham has the potential to "generate a sense of momentum" nationally.
Haldane suggested that Burnham should be "bolder and brassier" in his leadership to boost economic dynamism. He proposed expanding the Office for Budget Responsibility's forecasting window to 10 years, even if the borrowing forecast remains at three years. This aligns with views held by Burnham's chief campaigner, Louise Haigh.
In an interview with City AM, Haldane praised Burnham's tenure as Mayor of Greater Manchester, where GDP growth averaged around three percent and was accompanied by a positive shift in the region's "vibe." He believes these elements can be applied at the national level with bold leadership.
Haldane strongly criticized transaction taxes like stamp duty and the outdated council tax system. He endorsed a cross-party report advocating for property tax reform, suggesting a replacement with a combination of business rates and council tax changes, as property valuation bands have not been revised since 1991. He argued the case for a land value tax to replace "terrible" stamp duty is "clearer than ever."
Regarding capital gains tax, Haldane expressed caution about equalizing it with income tax, warning against using it as a "cash cow" due to the volatility of receipts. He also reiterated his long-standing criticism of the triple lock pension, calling it "fiscally unsustainable" and a threat to public finances, suggesting it needs to be tackled.
Responding to Haldane's comments, Centax director Arun Advani noted that their report aimed to foster cross-party debate on tax reform, with consensus that plausible alternatives are better than the status quo.