Conservative MP Kemi Badenoch has warned that tax increases are imminent under Prime Minister Andy Burnham, urging him to prioritize cutting the benefits bill over imposing further costs on businesses and workers.
In a speech delivered in London, Badenoch cautioned that Burnham's ambitious spending proposals, which she described as "lavish promises," make tax rises inevitable. She drew a parallel between Burnham's approach and the policies of former Prime Minister Liz Truss, whose tenure ended abruptly in 2022 following market turmoil.
"Four years ago, a Prime Minister announced policies without making savings to pay for them and it didn't end very well," Badenoch stated, referencing Truss's economic policies. She criticized Burnham for what she characterized as a pattern of "thinking out loud" and announcing "unfunded pledges."
Badenoch specifically cited proposals such as a national care service estimated to cost £18 billion and a plan to build council houses at a scale not seen since the 1970s, which she projected would cost £13 billion. She also noted Burnham's fluctuating statements regarding increases to the personal allowance.
"Every day Andy Burnham seems to float a new expensive idea," Badenoch said. "On Monday, he said he was thinking about increasing the personal allowance. On Tuesday he was against it. On Wednesday he was for it again. Does anyone know what he's thinking today? Because I don't. He doesn't actually know what he wants to do. He is thinking out loud. All we know is that it is going to cost a lot of money."
Badenoch revealed that Burnham has not responded to her offer to assist in driving through welfare cuts, which she noted face opposition from within his own party. "We have seen this movie before. Tax rises are coming," she asserted.
Burnham's office has outlined cost-of-living pledges totaling £1.6 billion within his first few days. However, ministers have struggled to detail the funding mechanisms for many of these initiatives. The Prime Minister has also indicated support for more substantial policies, including a national care service, a large-scale council house building program, and potentially bringing privatized utilities under state control.
Downing Street has yet to provide costings or funding plans for these larger initiatives. While officials are developing proposals for a national care service, with initial estimates at £18 billion, alternative, less costly options are also being explored. Burnham has considered a 10 percent levy on estates to fund social care, a proposal critics have dubbed a "death tax." Badenoch stated her opposition to this plan, arguing it would penalize individuals who have prepared for their later-life care needs.
Treasury Chief Secretary Emma Reynolds maintained that the week's announcements could be financed without tax increases. When questioned about whether Burnham would raise taxes, she responded, "No, we are not saying that this week."
However, Neal Lawson, identified as a long-time ally of Burnham and head of the left-wing pressure group Compass, suggested that achieving the Prime Minister's vision would necessitate tax increases. He advocated for reversing Labour's pledge not to raise income tax, national insurance, or VAT, arguing that "when governments make stupid decisions they should reverse them, especially when they have a new leader."