Speaking in conversation with Andrew Marr at the New Statesman’s Path to Power conference today (28 November), the mayor of Greater Manchester warned that public spending pressures after 13 years of Conservative government meant Labour “won’t be able not to raise the issue of tax”. To date, Keir Starmer and Rachel Reeves have only promised limited tax rises, such as the abolition of non-domicile tax status and the addition of VAT to private school fees.
However, Burnham emphasised that tax increases should not automatically be viewed as unpopular, arguing that “the public are ready to be given a sophisticated argument about where things need to change”.
Burnham suggested a range of tax options that could be explored, including a tourist tax for major cities (a common practice across Europe), a land-value capture tax so local communities benefit for new development, and a “care levy” to fix the UK’s dysfunctional social care system. He argued there would be less public resistance to this than is often anticipated, pointing out “it’s not fun draining your parent’s bank account to pay for care”. He urged that the UK look to Scandinavia’s high-tax economies as a model of what can be achieved, and floated the possibility of a universal basic income to replace the benefits system.
As well as revisiting the issue of local taxation, Burnham called for radical constitutional reform in the first term of a Labour government: proportional representation, reform of the House of Lords, and more devolution to make levelling up a success. He said the Covid inquiry, to which he gave evidence yesterday, had exposed “the complete inadequacy of the governance of Britain”, and demonstrated that “the rewiring of Britain is now urgent”.
While it has been suggested this may not be a top priority for Keir Starmer, Burnham insisted, “That is the wrong thinking. We should have rewired the country in 97 and we didn’t.”
That wasn’t the only comparison to Tony Blair’s landslide victory. While the economic conditions facing the country are very different now than they were 27 years ago, Burnham exuded optimism, telling the audience “I think 24 could be a better moment than 97”. There was, he argued, a “more realistic mood” now than faced by Blair, without the same “weight of expectation”.
[See also: The everyday economists guiding Rachel Reeves]