Andy Burnham Faces Pressure for Radical Tax Overhaul as PM

Economists and policy experts are urging Andy Burnham to implement a radical fiscal overhaul when he becomes prime minister on July 20, following the resignation of Keir Starmer. In a report titled Prosperity 2030, the Institute for Global Prosperity proposes replacing income tax, capital gains tax, inheritance tax, and national insurance with a single national contributions levy. The authors estimate this shift could raise an additional £75 billion annually within five years to fund services such as free primary school lunches and bus travel.

Burnham has nominated himself for the Labour leadership and indicated he will maintain current fiscal policy plans, though he has proposed specific reforms. His agenda includes raising the personal income tax allowance for low earners and potentially reintroducing a 50p top tax rate. He also intends to abolish inheritance tax in favor of a social care levy on inherited assets. Both the Prosperity 2030 report and Burnham's own plans suggest replacing stamp duty and council tax with a property or land value tax.

Beyond taxation, Burnham has advocated for the nationalization of Thames Water. He argued that the water industry is run in the private interest, stating that shareholders currently profit while bill payers do not. However, some critics have questioned the financial feasibility of the proposed reforms, with tax expert Dan Neidle challenging the assumptions within the Prosperity 2030 report.