Analysis suggests wealthier residents and landlords could face higher bills under incoming prime minister.
Andy Burnham is expected to be confirmed as Labour leader this Friday and will formally become prime minister on July 20, taking over from Sir Keir Starmer.
As he prepares for his first Budget, attention is turning to what tax changes his government might introduce, and how they could affect households in the region.
Background
Burnham secured the Labour leadership after winning the Makerfield by-election last month, which made him eligible to stand following Starmer’s resignation announcement on June 22. He has been backed by the large majority of Labour MPs and is set to take office unopposed.
Burnham has not yet published a detailed set of tax proposals, saying he intends to stay within Labour’s existing fiscal rules, which require government debt to fall as a proportion of the economy over time. However, he has spoken openly about several policy areas under consideration.
What’s Being Discussed
Among the ideas Burnham has floated or declined to rule out:
Capital gains tax — He has said he would want to examine aligning capital gains tax more closely with income tax rates.
Top rate of income tax — He has indicated support for a 50 per cent top rate for the highest earners.
Property taxes — He is reportedly considering lowering the threshold for a proposed “mansion tax” on higher-value homes from £2m to £1.5m, which would draw more properties into higher council tax bands, particularly in London and the South East.
Landlord income — A possible levy applying National Insurance to rental income has also been discussed. The Institute for Public Policy Research estimates this could raise around £3bn a year nationally, though some economists have warned it may reduce the supply of rental properties and push up rents for tenants.
Estates and inheritance — Proposals for a “care levy” of up to 10 per cent on estates after death have also been raised as a way of funding social care reform.
A think tank aligned with Burnham, Mainstream, has estimated a similar rental income measure could raise up to £14bn, while cautioning it might prompt some wealthier taxpayers to move their assets or residency abroad.
Political Reaction
Opposition parties have seized on the uncertainty. Reform UK published its own analysis at the weekend estimating that, combined with tax rises already introduced by Chancellor Rachel Reeves, including changes to employer National Insurance contributions, VAT on private school fees and frozen income tax thresholds, total tax increases under Labour since 2024 could exceed £100bn a year if Burnham proceeds with the policies under discussion.
The party’s economy spokesman, Robert Jenrick, has called on Burnham to rule out ten specific measures by name.
Supporters of Burnham argue the figures are speculative, pointing out that no formal Budget proposals have been announced and that many of the ideas being discussed are options rather than commitments.
Economic Context
Lord O’Neill, a former Goldman Sachs chief economist now advising Burnham, sought to calm concerns over the weekend, telling the Rest Is Money podcast that the incoming government would not impose punishing tax rises on the public. He also called for the pensions triple lock to be reconsidered, arguing it placed an unfair burden on younger people already struggling with housing costs.
The UK’s overall tax burden is currently at a record high, and the Treasury spends roughly a tenth of total public expenditure on debt interest.
What Happens Next
Burnham is also weighing who to appoint as chancellor, with Energy Secretary Ed Miliband reportedly under consideration alongside more centrist figures such as Wes Streeting and Shabana Mahmood. His choice, along with the contents of his first Budget, is likely to give the clearest indication yet of which of these proposals, if any, will move forward.
Residents concerned about how any changes might affect property values, rental costs or estate planning are advised to keep an eye on further announcements as Burnham’s government takes shape over the coming weeks.
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