Burnham's economic advisory team fails to materialise amid wealth tax divisions

Andy Burnham has been left without a formal council of economic advisers a month after entering Downing Street, after three high-profile figures reported to be advising him declined to take up roles. Lord Jim O'Neill, former Bank of England chief economist Andy Haldane and ex-Office for Budget Responsibility chair Richard Hughes were all widely reported to be shaping the new government's economic thinking before the Makerfield by-election. None has joined the administration.

According to City AM, O'Neill remains in talks but has not accepted a position because of his opposition to a potential wealth tax and the Prime Minister's refusal to rule out the policy. The former Goldman Sachs executive is also said to want to retain oversight of his business interests and shareholdings in financial groups. The absence of a senior economic team contrasts with the reassurance their reported involvement gave to investors before Burnham took office.

Party splits over taxation

The vacuum at the centre of economic policy reflects open divisions in the parliamentary party. During Sir Keir Starmer's premiership, a group of backbenchers including Barry Gardiner and Dawn Butler pushed for a two per cent annual tax on assets above £10 million, arguing it could raise tens of billions of pounds. Both MPs have since backed Burnham for the leadership.

More moderate figures aligned with the Labour Growth Group and supportive of Wes Streeting have advocated a different approach: equalising capital gains tax with income tax while preserving allowances that encourage investment. Haldane warned in an interview with City AM that any such increase should not be treated as a "cash cow".

One Labour strategist expressed surprise that Burnham had not appointed any economic advisers while another suggested Louise Haigh was running policy "with ChatGPT".

Budget pressure builds

With an Autumn Budget date already set, the City is bracing for tax rises from Chancellor John Healey. Ruth Gregory, deputy chief UK economist at Capital Economics, estimates that new revenue measures could approach the £26 billion raised by former Chancellor Rachel Reeves last year. Given the manifesto commitment not to increase income tax, national insurance or VAT, the burden is expected to fall on capital, wealth and property.

Burnham has retained Neil Amin-Smith, an adviser to Reeves, to assist with economic policy in the interim. But the lack of a visible, independent economic council leaves the government exposed to market scrutiny as the Budget approaches.