He will stick to the Labour manifesto of not raising the main three taxes – income tax, National Insurance and VAT. But we’ve already seen since the election that other taxes can be altered, such as inheritance tax changes affecting family farms, often bringing a vociferous response.
Among the possibilities are:
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Replacing stamp duty and council tax with an alternative property tax
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Higher rates on capital gains tax, which you pay on the profit when selling assets such as property outside a primary home as well as some shares, to bring them in line with income tax rates
Any such reforms would take time, and bring winners and losers. When Reeves and Starmer tried to make big changes, even with a big majority, numerous u-turns followed.
Burnham and his chancellor are also expected to stick to the government’s self-imposed fiscal rules, a set of choices on government tax and spending decisions.
Opinion is divided on whether these are sensible building blocks for the economy which allow living standards to improve, or a “dysfunctional” economic straitjacket.
“The [resulting] rummage down the back of the sofa for loose change has hit personal finances hard, changed the tax landscape, and makes it more challenging for people to save for their future,” says Rachel Vahey, head of public policy at investment platform AJ Bell.
