What Burnham’s policies might mean for your taxes, mortgage and money if he becomes prime minister

Andy Burnham is seen as the frontrunner to become prime minister after Keir Starmer’s resignation and his win in the Makerfield by-election.

Brits will want to know what’s in store as the Labor government faces another reshuffle, and the first speech detailing what it might want to achieve on Monday will shed light on many key areas.

We’ve all seen politicians say they plan to do one thing and end up being unable or unwilling to carry it out; So it remains to be seen whether Mr Burnham, in No 10, can replicate the success he enjoyed as mayor of Greater Manchester.

Here, Independent We take a look at how your pocketbook could be affected if Mr Burnham becomes prime minister, based on what he’s said previously and touched on in his speech at the People’s History Museum in Manchester.

Mortgages

The first thing to understand, or at least accept, is that money markets are a minefield of cause and effect.

Here’s an example: In September last year, Mr Burnham said: “We must move beyond the issue of being hostage to bond markets.”

What does this mean? It might go something like this: Gilt bonds, also called UK government bonds, are sold if markets don’t like a new economic plan (or lack thereof) that lowers the price but increases the yield. This return is actually the cost of the government to borrow and spend on things like infrastructure and utilities, so the amount the government has to pay in interest increases.

If it also sees overseas investors losing faith, the value of the pound could fall (it has fallen slightly by 1.5 per cent since Friday), making imports more expensive and creating an inflationary effect – or if the Burnham government rapidly increases public spending, causing demand for goods and services to rise, this could also be inflationary.

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When prices rise too quickly (high inflation), the Bank of England (BoE) may step in to consider raising interest rates, and if the market gets a whiff of this, it will raise swap rates much more quickly – these are essentially future expectations of interest rate movements and are the tool by which lenders base the price of mortgage products even if the BoE base rate does not move.

When swap rates increase, as seen during the Iran war, headline interest rate figures on mortgages also increase.

Chancellor election means a lot

Whoever becomes Prime Minister, the chancellor’s choice will also have an impact on how bond markets react, including Mr Burnham’s earlier promises to stick to the current fiscal plan.

The current chancellor, Rachel Reeves, is seen as stable, consistent and predictable; It’s everything the market loves.

Ed Miliband, who is close to Mr Burnham, has been touted as an option, but there are also reports he could be considered for the role to prevent Wes Streeting from launching a leadership bid. Mr Burnham confirmed he had not yet confirmed who would be in cabinet but would stick to current fiscal policy plans.

“The choice of chancellor could have a big impact on bond markets if Burnham becomes prime minister,” said Dan Coatsworth, head of markets at AJ Bell.

“Bond investors like the boring and boring; they want someone who has a plan with maths piling up and sticks to it. Former transport secretary Louise Haigh is seen as one of Burnham’s closest allies, but a fraud conviction could prevent her from becoming the country’s numbers man. Ed Miliband has also been touted as a potential chancellor candidate and will bring considerable experience from previous senior political roles.”

Edward Allenby, senior economist at Oxford Economics, noted that the pace of change could mean Mr Burnham had little choice but to continue with what had already been planned.

“There is little to suggest that Burnham’s team has a detailed policy package currently in the works,” he said. “It will become even more difficult to develop this package in time for the fall budget if Burnham must first win a lengthy leadership contest.”

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Property costs

Mr Burnham has previously suggested that stamp duty and council tax should be reformed, with land value tax (LVT) replacing stamp duty on property sales. Guard In 2010.

The idea is to make buying to get up the ladder more accessible for those with lower financial support, while also making it harder to avoid paying later.

“This won’t be a priority issue but a move to tax the asset rather than the transaction appears to be on Burnham’s radar,” said Tom Bill, head of UK residential research at estate agents Knight Frank.

“He supports a proposal from campaign group Fairer Share, which wants to replace stamp duty and council tax with a tax equivalent to 0.48 per cent of a property value.

“The simplicity of the proposal is laudable and abolishing stamp duty makes sense given how it hinders social and economic mobility, but the proposal in question seems overly political. Shouldn’t the sole aim be to maximize tax revenue?”

Of course, it won’t be popular with everyone.

“Under the plan, homeowners, developers, overseas buyers and second home owners will pay more,” Mr Bill said.

“A similar approach to stamp duty since 2014 has restricted activity in the kind of high-value locations where most revenue is likely to be targeted. A steady flow of tax revenue has obvious benefits for the Chancellor, but politicizing the housing market feels like a tried-and-failed approach.”

Mr Bill adds that the process can also lead to higher rents due to fewer properties being available, but there are also implementation costs to consider.

Tim Stvold, tax director at accountancy firm Moore Kingston Smith, said: Finance Times: “Property values ​​will decrease when this type of tax is implemented.”

Income, council and inheritance tax

The three taxes worth mentioning in relation to Mr Burnham are income tax, inheritance tax (IHT) and council tax.

Firstly, the current threshold at which an earner becomes a basic taxpayer is £12,570. He talked about increasing the personal allowance, which has been frozen for more than five years. While the move puts more money in the pockets of low earners and basic rate taxpayers, recent increases to the state pension have left pensioners on the verge of paying tax even if they have no other income.

At the other end of the scale, he suggested there was “absolutely a case” for reintroducing the top rate of income tax at 50p; currently 45 per cent of income above £125,140.

He had a bold idea to abolish inheritance tax and replace it with a social care tax on inherited assets. It will soon incorporate unused retirement benefits, which it has not done before, making succession planning even more important and challenging for families.

One of the notable changes made in Manchester was the halving of bus fares after the transport network was brought under public control. Usage increased accordingly, but municipal taxes were increased to subsidize the move.

Share prices of FTSE 100 water firms Severn Trent and United Utilities fell 1.5 per cent on Friday as investors became wary of the potential for expropriation early on.

“Public ownership is certainly an option. I would say that’s the thing to do for Thames Water,” Burnham said in early June – but this is about a private company with tens of billions of dollars of debt, not a profitable publicly traded company serving a quarter of the UK population.

Mr Burnham also said: Guard earlier this month: “If you look at water as an industry as a whole, it is predominantly run by private interest rather than public interest – in other words, it is an industry where shareholders can never lose and ratepayers can never win.”

When investing, your capital is at risk and you may get back less than you invested. Past performance does not guarantee future results.