Burnham's Coronation as PM Nears Without Contest
Andy Burnham is set to enter 10 Downing Street on Monday as the next Prime Minister, following a coronation that has seen no Labour MP challenge the newly elected member for Makerfield. This lack of scrutiny leaves major questions about his economic direction unanswered, with the biggest being whether he will raise taxes.
Economic Stagnation Under Labour
Shadow Chancellor Sir Mel Stride wrote in the Daily Express that Rachel Reeves, the outgoing Chancellor, failed in her “number one mission” of economic growth. Two years of Labour rule have left Britain’s economy barely moving, as evidenced by recent growth figures. Stride attributed this failure to Labour’s economic choices, including higher taxes that have squeezed families, workers, and businesses, resulting in record tax levels but little growth.
Spending Promises and Tax Risks
Burnham has made several expensive spending commitments, such as the largest council house building programme since the war, nationalising utilities, and plugging a £5 billion hole in Labour’s Defence Investment Plan. Stride argued that the only ways to pay for this are borrowing more, cutting spending elsewhere, or raising taxes. Borrowing is already stretched, with Reeves planning over a quarter of a trillion pounds in extra borrowing this Parliament, while Burnham insists on sticking to fiscal rules. Spending restraint, especially on welfare, would be sensible but Burnham has shown little appetite for it.
Signs of Further Tax Hikes
Reports suggest Burnham is considering fresh tax rises, and his allies openly discuss higher taxes on assets, property, and capital gains. Additionally, Burnham may appoint Shabana Mahmood as Chancellor, who has a long record of calling for higher taxes. Stride warned that Britain cannot afford another round of tax, spend, and borrow profligacy.
Damage to Business Confidence
The uncertainty over tax policy is already damaging confidence, with businesses delaying investment and employers holding back on hiring. Stride emphasised that Britain’s problem is not revenue but growth. He urged Burnham to rule out further tax rises to restore confidence and demonstrate different leadership.
Sir Mel Stride is the Shadow Chancellor.
