Some of Britain’s leading economists have urged Andy Burnham to tear up the UK’s tax system, calling for stamp duty and council tax to be scrapped and replaced with a single annual property value tax.
The group, which includes Lord O’Neill of Gatley, the former Goldman Sachs chief economist who advises Burnham, has written an open letter to the man widely expected to become the next prime minister, warning that structural reform can no longer be delayed.
Their intervention endorses Prosperity 2030, a five-year programme from University College London’s Institute for Global Prosperity launching on Thursday, which the signatories say “models how fiscal, welfare, and infrastructure policies can unlock the gridlock that plagues the country”.
Burnham is on course to enter Downing Street on 20 July if he wins the Labour leadership, inheriting an economy weighed down by high debt and stubbornly low growth. Westminster and the City are watching his fiscal plans, and his choice of chancellor, particularly closely after his Manchester speech last week calling for greater devolution. As Business Matters has reported, Burnham has already signalled “room for movement” on tax, pledging a business rates cut for pubs and high street firms.
The centrepiece of the report is a single national contributions levy that would replace six separate taxes: income tax, employee and self-employed national insurance, dividend tax, inheritance tax and capital gains tax. The levy would run from 0 per cent to a 22 per cent base rate, with a 46 per cent top rate applied to a “flat definition” of income, raising an estimated £75 billion after five years.
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