As Andy Burnham prepares to take the reins at 10 Downing Street, his stance on wealth taxes has sent ripples through Westminster, sparking concern among some Labour MPs who had hoped for a more radical approach. Despite speculation that he may be set to appoint a centrist Home Secretary as Chancellor, Mr Burnham's emphasis on avoiding "new divisions" and "grudges" has led allies to interpret his position as a signal against immediate wealth taxation.
The incoming Prime Minister's comments come at a time when the business community is watching developments in Westminster with bated breath. While some may welcome Mr Burnham's cautious approach, others are worried that it could limit the new government's ability to raise revenue and fund its promised policies.
When questioned about wealth taxes by podcaster Gary Lineker, Mr Burnham stated: "I don’t want to come in and sort of, if you like, create new divisions and pitch people one against another." He acknowledged a need for "a greater sense of fairness" but stressed that this was not something he wanted to address immediately. While not ruling out future changes entirely, he clarified: "those decisions are not for now. They’re for another day."
Mr Burnham's administration will inherit several pressing financial issues, including the need to find an additional £4.7 billion to fund the government’s defence investment plan and securing financing for his proposed plans to bring utilities under public control.
It is worth noting that Mr Burnham has previously committed to adhering to the government's borrowing rules and the Labour Party's 2024 manifesto, which explicitly ruled out increases to National Insurance, income tax, or VAT. However, he did suggest earlier this month that there remained scope to adjust other taxes, citing business rates as a potential area for reform.
Some prominent supporters, including parliamentary ally Louise Haigh and former Health Secretary Wes Streeting, have previously urged consideration of wealth taxes as a means to generate revenue for public services like the NHS and schools. However, Treasury officials have expressed scepticism about the revenue-generating potential of such a move, citing concerns over asset flight or delayed sales.