Conservative minister Kemi Badenoch has warned that "taxes are coming" and suggested that Prime Minister Andy Burnham could follow a similar path to Liz Truss, whose brief premiership ended in economic turmoil. Badenoch urged the new prime minister to rule out new taxes and instead focus on reducing the benefits bill.
In a speech in London, Badenoch criticized what she described as Burnham's pattern of announcing unfunded pledges. "Four years ago, a Prime Minister announced policies without making savings to pay for them and it didn't end very well," she stated, referencing Truss's downfall in 2022. She pointed to several of Burnham's proposals, including a national care service estimated to cost £18 billion and a plan to build council houses at a 1970s pace, costing £13 billion. Badenoch also noted Burnham's shifting stance on increasing the personal allowance, questioning his decision-making clarity.
Badenoch claimed that Burnham has made cost-of-living pledges totaling £1.6 billion in his first few days, which she suggested are inadequately funded. The Prime Minister's office has not detailed how these plans, along with more substantial proposals like a national care service or bringing privatized utilities into state control, will be financed. Officials are reportedly developing proposals for a national care service, with estimates ranging, though a £10 percent levy on estates, termed a "death tax" by critics, has been floated as a potential funding source. Badenoch stated she would not support such a tax, arguing it would penalize those who planned for their later care.
However, Treasury Chief Secretary Emma Reynolds insisted that the week's announcements could be funded without tax increases. "No, we are not saying that this week," Reynolds told BBC Radio 4's Today programme when asked about potential tax rises. Despite this, Neal Lawson, an ally of Burnham and head of the pressure group Compass, suggested that achieving the Prime Minister's goals would necessitate tax increases, potentially including breaking Labour's pledge not to raise income tax, national insurance, or VAT. Lawson argued that circumstances have changed, making it necessary to reverse previous manifesto commitments.
