A sense of trepidation hangs over UK voters as they anticipate a significant increase in taxation under a prospective Andy Burnham government. A recent poll, conducted by City AM and Freshwater, reveals that 55 per cent of respondents expect tax levels to rise, regardless of who serves as Chancellor, with only nine per cent believing taxes will decrease.
This widespread expectation is intriguing given Labour's 2024 manifesto commitments to avoid increasing income tax, Value Added Tax (VAT), or National Insurance contributions. However, under the current Chancellor, Rachel Reeves, a significant £65bn in tax increases has been implemented over the past two years, largely through adjustments to smaller taxes and an estimated £25bn hike in employer's National Insurance contributions – a move economists have linked to a rise in the unemployment rate.
Internal discussions among senior Labour figures, including former Manchester Mayor Andy Burnham and Shadow Health Secretary Wes Streeting, suggest they are considering aligning capital gains tax with income tax. Other potential reforms, such as property levies and wealth taxes, have also been rumoured to be under consideration. Perhaps most tellingly, 51 per cent of voters expressed support for increasing charges on wealth – including assets or property – to fund public services, despite concerns raised by experts like the Institute for Fiscal Studies and Dan Neidle regarding the potential impact and effectiveness of such a direct levy.
Burnham's adviser, former Bank of England economist Andy Haldane, has cautioned against using capital gains tax reform as a means to generate revenue. Yet, voters largely endorse Burnham's commitment to fiscal rules and his pledge to launch the largest council housebuilding programme in post-war Britain. Support is less pronounced for proposals such as cutting the welfare budget to increase defence spending – an idea championed by Conservative leader Kemi Badenoch – or creating a 'Number 10 in the North' as part of a devolution drive.
A spokesperson for Andy Burnham has stated they will not comment on tax speculation, emphasizing that official policy positions would be developed through due process rather than in response to speculative reports or polling data.