Prominent economists, including Jim O’Neill, an ally of Andy Burnham, are urging the MP for Makerfield to pursue radical tax and spending reform after he becomes prime minister. In an open letter, they call for bold action to “unlock the gridlock that plagues the country.”
The letter, signed by figures such as Professor Jonathan Portes and Danny Sriskandarajah, notes that taxes in Britain are rising faster than in comparable economies while public services deteriorate. The signatories argue that the problems are structural and systemic, and have persisted across seven prime ministers in ten years.
The blueprint, outlined in a report from the Institute for Global Prosperity titled Prosperity 2030, suggests replacing six key taxes – including income tax, capital gains tax, inheritance tax, and national insurance – with a single levy on all income. The authors claim this could raise an additional £75bn a year within five years, depending on the rate.
Other proposals include scrapping stamp duty and council tax in favour of a national 1% levy on property value, with proceeds remitted to local authorities. The report also calls for trebling air-passenger duty and using the extra revenue to fund universal services such as free bus travel and free school lunches for all primary pupils.
However, tax expert Dan Neidle of Tax Policy Associates has questioned the plausibility of the report’s assumptions, stating he does not see where the numbers come from. Burnham is expected to be confirmed as Labour leader on 17 July and to take over as prime minister on 20 July.
