Labour plotters issue bombshell plans to scrap stamp duty | UK | News
Key Labor MPs expected to shape any future leadership contest are demanding a wholesale rethink of the party’s economic platform; Wealth taxes, abolition of stamp duty and shrinking the Treasury are on the table.
Two influential parliamentary groups have published rival economic plans for a post-Starmer Labor Party; Both sets of proposals are expected to be closely scrutinized by those committed to the leadership race.
Soft-left parliamentary group Tribune put forward the more radical of the two visions: it called for the abolition of the Treasury’s growth tax and the abolition of stamp duty in favor of a national land and property tax. Its leader, former transport secretary Louise Haigh, was the first senior Labor figure to openly pressure Starmer to set a departure date. The Tribune is seen as a frontrunner for Manchester Mayor Andy Burnham, who is known to want to challenge Starmer for the leadership.
The centrist Labor Growth Group has taken a different tack, focusing on closing what it calls wealth tax loopholes and redirecting revenue into a 2p cut to workers’ national insurance. Its chairman, Chris Curtis, made his voice heard on Monday to those calling for Starmer’s resignation. Both groups have around 100 MPs, with significant crossover among their members.
What does Louise Haigh suggest for the economy?
Haigh’s paper, to be published on Tuesday, takes direct aim at the Treasury and the Office for Budget Responsibility, arguing that both institutions have locked Britain into a short-term cycle driven by five-year forecasts and restrictive “earnings margin” targets that stifle investment.
The result is a system caught between market reliability and democratic accountability; this system consistently sacrificed long-term investments on the altar of short-term fiscal prudence. He said financial institutions are torn between “having to prove our trustworthiness to the financial markets that lend us money and delivering change to the voters who trust us in 2024.”
What is the economic plan of the Tribune group?
The gist of his plan, according to a Times report, is to move beyond the current three- and five-year rolling approach to a ten-year debt target to give the government leeway to invest in projects that pay dividends over the long term: “the confidence to seek funds from markets to achieve projects that will bear fruit beyond a given parliament.”
Haigh is reportedly careful to avoid calling for the removal of existing rules – arguing that the rules should be followed first – but is understood to want the framework to be rebuilt around longer horizons and remove its dependence on the “earnings margin” measure once the budget is balanced.
Haigh had particular criticism of a tax system that he described as structurally biased against workers, being lenient on wealth and assets while suppressing earned income. He called for lower taxes on work and advocated “a simpler system with fewer benefits, clearer rates and more consistent treatment of different forms of income and assets”.
Property recommendations are comprehensive; Stamp duty will be abolished completely, replaced by national land and property tax, while council tax will be sharply cut and redirected entirely to local services. This change will require social care to be nationally owned and centrally funded. He also backed targeted cuts to business rates and reforms to VAT thresholds.
‘England does not work anymore’
Haigh told The Times: “Britain’s economic model no longer works for our country or our people. Growth is too weak, too unbalanced and too often driven by asset inflation rather than productive investment. We can’t fix this with incremental change; we need to rethink how our economic institutions work and what they are designed to deliver.”
“This means realigning the institutional framework to support long-term investment rather than short-term constraints, and reshaping institutions such as the Treasury that are not currently set up to stimulate growth. It also means being honest about today’s constraints, including high borrowing costs, and focusing much more seriously on how we concentrate investment across the economy.”
What does the Labor Growth Group recommend?
The Growth Group’s document, released on the same day, focuses on capital gains reform; closing what it calls “death and exit gaps” and channeling savings into a national insurance cut of up to 2 per cent for workers.
A minister supporting the report said: “I’ve spent six weeks talking on doorsteps to people whose families have voted Labor for generations and now don’t know what we stand for. “We’ve lost too many good Labor local representatives who put their hearts out for their communities, and frankly we owe it to them to give an honest account of why.
“Voters are telling us that working hard and doing the right thing no longer pays off. If we don’t find an answer to that now, we’re done.”
