Economists urge Andy Burnham to consider major tax overhaul
8 reported
A group of prominent economists, including Jim O’Neill, an ally of Andy Burnham, have signed an open letter urging the incoming prime minister to pursue radical tax and spending reform. The letter, which also includes Jonathan Portes, Danny Sriskandarajah, John Muellbauer, and Prof Henrietta Moore, argues that taxes in Britain are rising faster than in comparable economies while public services deteriorate. They propose starting with a blueprint from a new report called Prosperity 2030, which suggests replacing six key taxes, including income tax and national insurance, with a single levy on all income. The report claims this could raise an additional £75bn a year within five years, with proceeds spent on universal services like free bus services and free school lunches. However, tax expert Dan Neidle has raised questions about the plausibility of the report’s assumptions. Burnham is expected to be confirmed as Labour leader on 17 July and to become prime minister on 20 July.
What’s reported
Economists including Jim O’Neill, Jonathan Portes, Danny Sriskandarajah, John Muellbauer, and Prof Henrietta Moore signed an open letter urging Andy Burnham to pursue tax and spending reform.
The letter states taxes in Britain are rising faster than in comparable economies while public services deteriorate.
The Prosperity 2030 report suggests replacing income tax, capital gains tax, inheritance tax, and national insurance with a single levy on all income.
The report claims this could raise an additional £75bn a year within five years.
Proceeds would fund universal services including free bus services and free lunches for all primary schoolchildren.
Dan Neidle from Tax Policy Associates questioned the plausibility of the report’s assumptions.
The report also proposes scrapping stamp duty and council tax for a national 1% levy on property value.
Burnham is expected to be confirmed as Labour leader on 17 July and become prime minister on 20 July.
Key figures
Andy Burnham, MP for Makerfield, incoming prime minister
Jim O’Neill, economist and ally of Burnham
Jonathan Portes, economics professor at King’s College London
Danny Sriskandarajah, chief executive of the New Economics Foundation
John Muellbauer, senior research fellow of Nuffield College, Oxford
Prof Henrietta Moore, director of the Institute for Global Prosperity at University College London
Dan Neidle, tax expert from Tax Policy Associates
Louise Haigh, MP for Sheffield Heeley
Keir Starmer, outgoing prime minister
Ed Miliband, energy secretary, potential chancellor
Sources: The Guardian
