Top Burnham adviser calls for capital gains and inheritance tax hikes
Andy Burnham’s top adviser has called for capital gains and inheritance tax to be hiked and the fiscal rules to be loosened so the government can borrow billions.
Ex-transport secretary Louise Haigh, who led Burnham’s Makerfield campaign and is set to take a senior position in his Cabinet, is also pushing to dismantle the Treasury.
Writing in left-leaning magazine Renewal on Saturday, Haigh said to “deliver a meaningful economic renewal” for Britain, “a fundamental redesign of the UK tax system is required”.
“No more tinkering round the edges, but a full-scale reform agenda,” Haigh wrote, adding that “tax reform is an essential part of the solution.”
Haigh’s comments come before a major speech Burnham is due to make on Monday – his first policy announcement since Starmer’s resignation as prime minister – where he is expected to lay out his economic strategy, slashing Whitehall budgets and handing money to regional mayors.
Haigh is one of Burnham’s top allies and is playing a key part in formulating his domestic policy plan, and her comments may send jitters through the markets over concern of hiked taxes and increased borrowing, the Telegraph reported.
She also said capital gains tax “should be brought closer” to income tax, and that the proposed reform “is central to to restoring confidence that the system does not favour those able to structure their income over those earning through work.”
“It would shift the taxation burden away from punishing work, and towards unproductive capital accumulation which does little to grow the everyday economy,” Haigh wrote.
She added the reform “should be accompanied by measures, such as inflation indexation, to ensure that genuine investment returns are not unduly penalised” and said families should pay a new “death tax” on family members’ estates, and the current inheritance tax system raises “questions of intergenerational fairness.”
Exit tax ‘devasting’ for economy
This follows City entrepreneurs telling Morning Wire on Thursday Burnham must pull back on the so-called exit tax or else risk a wave of Britain’s wealth creators leaving the country.
The ‘exit tax’ would involve applying a capital gains tax to individuals who permanently leave the UK.
Some founders are already considering relocating overseas on the charge, which would be levied on business owners if they leave the country, according to several executives.
Barney Hussey-Yeo, founder of fintech firm Cleo, which was valued last year at over $1bn, said Labour “needs to rule it out now” as “founders are already planning their exit routes.”
“It’s going to be devastating for the UK economy,” he said.