Andy Burnham, the newly elected Labour MP for Makerfield, has pledged to protect so-called "middle-earners" from any income tax increases by HMRC if he becomes Prime Minister. The former Greater Manchester Mayor is widely tipped to succeed Sir Keir Starmer, but economists warn that raising substantial revenue without hitting this group will be challenging.
Burnham's Pledge and Economic Constraints
Burnham has stated he would adhere to Rachel Reeves' fiscal rules and avoid raising income tax, National Insurance, or VAT. However, Sarah Coles, head of personal finance at AJ Bell, noted that Burnham "has repeatedly demonstrated an enthusiasm for… revisiting wealth taxes and taxes on higher earners."
Dan Neidle, a tax lawyer and commentator, believes the strategy of taxing "other people"—such as high earners and financial services—has "run out of road." He added, "The idea of raising the basic rate of tax is anathema to most people, and this is the fundamental problem we are in."
Expert Warnings on Revenue
Ruth Curtice, head of the Resolution Foundation, acknowledged the difficulty: "Even though the overall tax burden is at postwar highs, that doesn't mean there aren't ways of raising more revenue. The problem is the manifesto constraints mean there are few ways of doing this without worsening the distortions in the tax system."
Paul Nowak, general secretary of the Trades Union Congress, accused "the wealthy and powerful — and their backers in the rightwing press" of trying to "water down the agenda of any future prime minister."
Potential Alternatives and Challenges
Neidle expressed scepticism about growth-focused reforms: "I would love to think a new prime minister would do things to boost growth, such as looking at corporation tax and making VAT less complicated, but I fear all we will see is more moving of the deckchairs."
Burnham's commitment to shield middle earners comes amid a broader debate on tax policy, with the Labour Party under pressure to balance fiscal responsibility with progressive taxation. The outcome could have significant implications for households across England.
