Prime Minister Keir Starmer's recent ministerial reshuffle has concentrated influence over Treasury policy among former staff of the Resolution Foundation, setting the stage for a November Budget that is likely to focus on taxes on wealth rather than raising income tax, VAT or employee national insurance.
Senior figures who worked at the left-leaning think-tank have taken on prominent roles in economic policy and the Treasury. The shift follows public comments from the chancellor ruling out further levies on "working people" — a move that narrows the scope of fiscal options and increases attention on taxes on inheritance, capital gains, pensions and other forms of wealth to help close a fiscal gap ministers and commentators have estimated at up to £50 billion.
The Resolution Foundation, established in 2005 by insurer Sir Clive Cowdery, is best known for producing the real living wage rate and has in recent years promoted shifting more of the tax burden onto wealth rather than earned income. The think-tank says it will publish recommendations later this month, but several possible measures have already been reported or modelled by its researchers and by ministers who trained there.
Key figures now in government include Torsten Bell, a former Treasury official who ran the Resolution Foundation from 2015 to 2024 and was elected as the Labour MP for Swansea West at the last general election. Bell has been given a leading role in preparing the Budget and will be closely involved in setting economic policy. Dan Tomlinson, another ex-Treasury official and former senior economist at the foundation, won the Chipping Barnet seat for Labour and was appointed exchequer secretary in the reshuffle. Vidhya Alakeson, who previously served as Bell's deputy at the foundation and worked in the Treasury, has taken on expanded Downing Street responsibilities overseeing policy and delivery. Baroness Minouche Shafik, a former Bank of England deputy governor and veteran of the International Monetary Fund, is serving as the prime minister's senior economics adviser.
Those appointments consolidate the influence of people who have publicly argued for a tax system that weighs more heavily on wealth. Bell has described the tax system as "a dog's dinner" and has advocated for tilting the system towards taxing wealth; a 2022 report by Tomlinson argued that not targeting wealth while incomes were squeezed was "indefensible." Cowdery, who co-chaired a recent foundation report with Shafik, created the foundation to focus on living standards for low- and middle-income households and sold his Resolution Life insurance business in a high-value transaction in 2024.
Several ideas associated with the foundation have already been implemented or foreshadowed in recent government measures. Last year’s Budget included the abolition of certain inheritance tax reliefs for family farms and proposals to treat unused pension pots as part of an estate for inheritance tax purposes from 2027. Those moves drew strong criticism from farming and saver groups.
Policy options the foundation has modelled and that now have sympathetic advocates inside government include a radical overhaul of the inheritance tax (IHT) regime. The foundation has proposed replacing estate-based IHT with a recipient-based levy, with a lifetime tax-free allowance of around £125,000, a basic rate of 20 percent on amounts received up to £500,000 and a 30 percent rate above that level. Current IHT rules exempt the first £325,000 of an estate and charge 40 percent thereafter, with a higher main residence band that can take the threshold to £500,000.
Pension taxation is another likely area of focus. Measures already announced would bring unused defined contribution pension pots into the estate for IHT from 2027, and officials are said to be considering further restrictions on the amount of tax-free cash that can be withdrawn from pension pots, which is currently capped at about £268,275. The foundation has also advocated rebalancing pension tax relief toward low- and middle-earners rather than the highest-rate taxpayers.
Other proposals under discussion include requiring landlords to pay national insurance on rental income. Rental income is currently exempt from national insurance when letting is not the taxpayer’s primary occupation; the foundation has argued that all landlords should pay national insurance, a step that would broaden the base of social contributions and raise revenue.
A Treasury figure has publicly ruled out raising taxes on earned income — such as income tax, VAT and employee national insurance — but left open measures that affect asset owners and recipients of wealth transfers. A Resolution Foundation spokesman said the organisation would "try to influence the upcoming Budget in the same way we have done for the past 20 years," noting its ongoing role in advising on living-standards policy.
The consolidation of former foundation staff in government marks a notable turning of personnel from a policy research body into positions of direct influence. Ministers and officials argue those appointments bring deep experience of living-standards analysis to economic policy development; critics warn that moves to broaden taxation of wealth could hit homeowners, pensioners and families expecting inheritances. The foundation and its former staff point to modelling that suggests recipient-based or more progressive wealth levies could raise materially more revenue than the current IHT system.
The new alignment between Downing Street, Treasury officials and former think-tank economists means the November Budget will be closely watched for concrete proposals on inheritance tax reform, pension taxation, landlord contributions and other measures aimed at shifting the tax burden from earned income to wealth. The foundation's formal recommendations, due later this month, are likely to be read as an agenda-setting document for the fiscal choices that follow.
