Key facts
- Andy Burnham has signaled he will not immediately increase wealth taxes upon becoming prime minister.
- Burnham stated he does not want to "create new divisions" or "demonise one group" with his tax policy.
- He acknowledged the need for "greater sense of fairness" and that difficult tax decisions lie ahead.
- Burnham suggested that decisions on wealth taxes are for "another day," not immediate implementation.
- Shabana Mahmood is considered the frontrunner for home secretary in a Burnham government.
Andy Burnham, widely expected to become the next Prime Minister, has indicated a potential shift in economic policy by not ruling out the introduction of a wealth tax. In comments made on Wednesday, Burnham stated he did not want to "create new divisions" with his tax policy, suggesting that immediate increases to wealth taxes are off the agenda. He emphasized the need for "greater sense of fairness" but also expressed a desire to avoid demonizing any group or creating division. Allies briefed that Shabana Mahmood is the frontrunner to become home secretary, seen as a move that could further sideline Burnham's more left-wing supporters.
Burnham acknowledged that difficult tax decisions lie ahead for his incoming government, including how to fund a £4.7bn defence investment plan and plans to bring utilities under public control. He has previously stated an intention to adhere to the government's borrowing rules and Labour's 2024 manifesto, which ruled out increases to national insurance, income tax, or VAT. However, he has flagged business rates as a potential area for change. Some prominent supporters, including Louise Haigh, have urged him to consider raising wealth taxes to generate revenue for public services, while Wes Streeting has called for capital gains tax to be raised to the level of income tax.
Tax experts and economists have raised concerns about the potential impact of a wealth tax, warning of capital flight and uncertain revenue generation. Historical attempts at wealth taxes in other countries have often been repealed due to low revenue and high implementation costs. Despite these warnings, proponents argue a wealth tax is necessary to address wealth inequality and fund public services.