Andy Burnham economics adviser Lord O’Neill calls for tax system overhaul
One of Andy Burnham’s key economic advisers has called on him to overhaul Britain’s tax system if he takes office.
Former Treasury secretary and economist Lord O’Neill was one of several signatories of a letter advising the prime minister to wait to streamline UK taxes to improve public services.
Draft version of the letter addressed to and seen by the government TelegramHe supports a new report from the UCL Institute for Global Wellbeing, which proposes a radical simplification of the tax system.
“We agree with the principle that underpins the report: The failures of the last half century are structural, not moral, and will be solved by rebuilding institutions, not by rebuilding people,” the letter signed by six economists said.
“Incrementality will not fix Britain.”
UCL report Prosperity 30 sets out a five-year plan to streamline the tax system and increase headroom to £38bn.
It proposes that income tax, employee national insurance, inheritance tax and capital gains tax be rolled into a single tax, called the national contribution, “applied consistently to all income”.
It is also reportedly proposed to replace stamp duty and council tax with a property value tax of 1 percent annually.
Mr Burnham has previously suggested that council tax and stamp duty could be replaced, advocating instead for a land value tax that would see property taxed at its market rental value.
In 2023, Mr Burnham also backed the abolition of inheritance tax in favor of a “national care tax” where everyone would pay to contribute to the national care service, but said “obviously the richest will pay the most”.
The letter accompanying the report warns that taxes in Britain are “rising faster than in any comparable economy while public services deteriorate”.
“Seven prime ministers in 10 years have inherited the same challenge and failed to solve it for the same reasons: the problems are structural and systemic,” said the letter signed by six economists. he says.
Lord O’Neill, who was joined by five other economists in signing the letter, is said to have served as one of Mr Burnham’s key economic advisers until his Makerfield by-election and subsequent bid to become the next prime minister, according to The Telegraph.
Mr Burnham sought to lay out his economic policies last week, suggesting there was “some room” for “action on tax” in the Labor Party manifesto.
The new Prime Minister has signaled he may consider increasing business rates at giant warehouses, while eliminating high street shops and pubs from having to pay business rates.
He has signaled he will introduce a so-called “Amazon tax” along with a major reform of business rates in a bid to save Britain’s high streets and pubs.
But he also told LBC’s Andrew Marr that Labor plans to stick to promises in its 2024 election manifesto not to increase income tax, VAT or national insurance personal contributions.
Calls for a wealth tax are also increasing from left-wing Labor MPs; A survey conducted earlier this year found that 91 percent of party members think the government should pay more taxes to the rich.
One way to do this would be to increase capital gains tax (CGT), which Louise Haigh, one of Mr Burnham’s key allies, has called for in recent days.
