What WILL Burnham tax to fund Labour’s lurch to the Left? Fears mount over raids on council tax, inheritance and pensions after PM-in-waiting says there is ‘room’ to increase burden

Fears of a new tax raid on Labor are rising after Prime Minister Andy Burnham said there was ‘room’ for new tax changes.

The former Greater Manchester mayor is almost certain to replace Keir Starmer in Downing Street on July 20 after returning to Parliament in the Makerfield by-election.

Mr Burnham is widely expected to move Labor left and raised alarm over his tax-and-spend economic agenda during a radio interview on Thursday night.

He said he would ‘stick to’ Labor’s 2024 general election manifesto, which pledged not to increase income tax, National Insurance or VAT, but insisted there was still ‘some room’ in the party’s promise to ‘act on tax’.

Concerns have grown that Mr Burnham, who will need to immediately find at least £4.7bn to fill the gap left by Sir Keir in the defense budget, will introduce sweeping changes to council tax, inheritance tax and stamp duty, as well as pensions.

But Conservative leader Kemi Badenoch warned that under Labor the tax level was ‘already too high’, adding: ‘This is killing growth, killing jobs and causing a crisis that is making the cost of living worse. ‘The only “leeway” Andy Burnham has is to cut spending so he can cut taxes.’

One of the tax increases Mr Burnham has confirmed he is planning is an increase in business rates on warehouses of online giants such as Amazon; this increase would fund a 20 per cent cut to business rates for pubs and eliminate business rates for some high street firms altogether.

But it is unclear whether Mr Burnham, who has not yet decided who will become Chancellor, will push for other tax changes he has put forward.

At the start of his campaign to become Makerfield MP in May, Mr Burnham called for a radical change to property taxes.

He said he had been ‘long convinced of the land value tax argument’ and was ‘personally keen to see reform of council tax’, describing it as ‘quite regressive’.

Mr Burnham, who previously suggested ‘land value tax’ could replace stamp duty, added: “I see a big case for replacing land, property and business taxes.”

Such a change could increase taxes on homeowners in parts of the country where land is more valuable, such as London and the South East, and reduce taxes in parts of the country where it is cheaper.

Mr Burnham also said during the by-election campaign that he ‘wouldn’t hesitate’ to revisit inheritance tax to ‘fix’ social care.

He has long advocated replacing inheritance tax with a ‘care levy’ to fund the national care service.

Mr Burnham’s claim that there is ‘some room’ for ‘action on tax’ in Labour’s manifesto has revived speculation that he will seek to equalize capital gains tax with income tax bands.

Capital gains tax on profit from the sale of an asset is currently taxed at a maximum rate of 24 percent; this rate is below the higher income tax rate of 40 percent.

Mr Burnham is reportedly considering a capital gains tax raid to fund plans to remove most green taxes from energy bills and instead pay them from general taxation.

Such a move could be extended to water bills, public transport or social housing costs as the future prime minister seeks to fulfill his promise to ‘make life more affordable for people’.

Mr Burnham has pledged to implement the triple lock on state pensions as part of his commitment to Labour’s manifesto.

This was despite two of his economic advisers – former head of the Office for Budget Responsibility Richard Hughes and former Treasury secretary Jim O’Neill – having previously spoken out against the triple lock, warning it was unsustainable.

Another of Mr Burnham’s economic advisers – Andy Haldane, the former chief economist of the Bank of England – recently called for pension tax relief to be offered only to savers who are prepared to invest in Britain.