Andy Burnham is reportedly considering raising capital gains tax rates as part of a new economic strategy, a move that could see increased taxes on the sale of shares and second homes. The potential tax hike is being explored to fund plans to remove green levies from energy bills, shifting these costs to general taxation.
Capital gains tax, currently capped at 24 percent, is applied to profits made from selling assets and is lower than the 40 percent higher rate of income tax. Burnham's team is said to be evaluating these rates, with possibilities that the increased revenue could also subsidize water bills, public transport, or social housing costs, aligning with a pledge to improve affordability.
Sources indicate that some within Burnham's circle also favor reassessing tax rates for private landlords. The proposed increases to capital gains tax could be framed as a 'wealth tax' aimed at appeasing left-wing Labour Members of Parliament. However, this potential policy has also generated concerns among some Labour MPs about its impact on voters in the South of England, particularly in light of Burnham's stated focus on boosting the North.
One MP expressed apprehension, emphasizing the need for a broad electoral coalition across the country, not just traditional Labour strongholds. "We've got to have a winning coalition that spreads across the country. It's not just the Red Wall," the MP stated, also noting potential gains by the Green Party in metropolitan areas. Another MP questioned Burnham's ability to govern for all regions, highlighting issues in areas like Cornwall and coastal communities.
Hollie Ridley, Labour's general secretary, is reported to be among those concerned about an overemphasis on the North, warning that neglecting the South could be detrimental to the party's electoral prospects.
Burnham is widely expected to succeed Keir Starmer as Prime Minister, with a potential transition to Downing Street as early as July 17 if he is the sole candidate to be nominated.