Analysis from Reform UK suggests incoming Labour leader could push total tax rises past £100bn a year
Andy Burnham, who is set to be confirmed as Labour leader and installed as prime minister on July 20, is facing fresh scrutiny after Reform UK published analysis alleging he intends to raise taxes on wealthier households by as much as £38bn to fund new government spending.
According to the Reform UK report, the proposed increase would push Labour’s cumulative tax rises since 2024 — combining Sir Keir Starmer’s record with Burnham’s anticipated agenda, beyond £100bn annually. The party’s calculations point to several policies Burnham has floated or signalled openness to, including a levy on estates worth up to 10 per cent after death, changes to capital gains tax, and the extension of National Insurance to landlords’ rental income.
Burnham is expected to be confirmed unopposed as Labour leader this Friday, having secured backing from the overwhelming majority of the Parliamentary Labour Party after winning the Makerfield by-election last month. He will formally take over from Starmer, who announced his resignation on June 22 amid mounting pressure following poor local election results for Labour.
Reform’s Case
Robert Jenrick, Reform UK’s economy spokesman, argued that Burnham has spent years pursuing tax rises targeting savings, inheritance, graduates and motorists, and challenged him to explicitly rule out ten specific measures. Reform’s broader claim is that, taken together with Chancellor Rachel Reeves’s record, including changes to employer National Insurance, VAT on private school fees, and frozen income tax thresholds, total annual tax increases under Labour could exceed £100bn.
Burnham himself has not published a detailed tax plan ahead of his first Budget, but has said he intends to keep within Labour’s existing fiscal rules, which require government debt to fall as a share of GDP over time. He has, however, left the door open to several significant changes:
- Backing an increase in the top rate of income tax to 50 per cent for the highest earners, which would break with Labour’s 2024 manifesto commitment not to raise income tax.
- Declining to rule out aligning capital gains tax with income tax rates, a change he has said he would want to examine.
- Potentially lowering the threshold for Reeves’s proposed “mansion tax” on high-value properties from £2m to £1.5m, which would bring more homes in London and the South East into higher council tax bands.
A levy on rental income from landlords, one of the policies cited by Reform, has been estimated by the Institute for Public Policy Research to raise around £3bn annually, though some economists caution it could tighten housing supply and push up rents.
By contrast, Mainstream, a think tank aligned with Burnham, has previously put the potential yield of a similar measure at up to £14bn, while acknowledging it could prompt some wealthy taxpayers to relocate abroad.
Chancellor Question Looms
Adding to the uncertainty is the question of who Burnham will appoint as chancellor. He is reportedly weighing Energy Secretary Ed Miliband for the role, a choice that has unsettled some Labour MPs who favour more centrist figures such as Wes Streeting or Shabana Mahmood.
Lord O’Neill, the former Goldman Sachs chief economist now advising Burnham on economic policy, sought to reassure critics on Sunday, insisting that the incoming government would not “tax the hell out of you.” Speaking on the Rest Is Money podcast, he contrasted this with what he characterised as Starmer’s more downbeat messaging to the public, and separately called for the pensions triple lock to be scrapped, describing it as unfair to younger generations struggling with housing costs.
Political Stakes
With Britain’s tax burden already at a record high, any further significant increases would intensify calls for Burnham to seek a fresh democratic mandate through an early general election, rather than governing on the strength of Starmer’s 2024 majority. Under current rules, the next general election need not be called until August 2029, though opposition parties are likely to keep up pressure on the question of legitimacy given Burnham’s uncontested path to Downing Street.
Burnham’s team has not yet responded in detail to Reform’s £38bn figure or confirmed which, if any, of the ten measures identified by the party will feature in his first Budget.
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