Andy Burnham, the new Labour Prime Minister, is considering a 10% inheritance tax on all estates, a move that could burden mortgage-free homeowners with bills averaging £74,737, according to research by Reform UK. The proposed levy aims to raise billions to tackle the UK's adult social care crisis, but has sparked fierce opposition.
Reform UK's Analysis and Criticism
Reform UK's Treasury spokesman Robert Jenrick condemned the plan, stating: "As a thank you for electing him, Burnham is considering imposing a universal death tax, in a move that would cost his average constituent a whopping £50,000, just as they are grieving at the loss of a loved one." Jenrick added that Burnham has "no mandate whatsoever to raid people's precious savings" and noted that voters have rejected a death tax on four separate occasions, calling it contrary to Burnham's own 'Makerfield Test'.
The research, based on Office for National Statistics data, indicates that the median house price in Burnham's own constituency of Makerfield is just under £200,000. Across England and Wales, the median price rises to around £295,000, meaning the tax would hit the South East and London hardest.
Government Response and Future Plans
When asked whether a 10% death tax is under consideration, Department for Work and Pensions Secretary Pat McFadden refused to rule it out. Speaking to Sky News, McFadden said: "Andy Burnham is going to be talking about social care tomorrow. This is a subject that’s been close to his heart for many years… He is determined, as he said, to put political capital into this, to put political energy into this. So we have to wait to see what he says in his speech tomorrow." He emphasised that social care is a long-term challenge that has not been tackled fundamentally, and Burnham is determined to face up to it during his premiership.
Impact on Homeowners and Wider Economy
For an average mortgage-free homeowner in England and Wales, the proposed 10% tax would amount to £74,737, based on median property values. This figure could be substantially higher in regions with elevated house prices, such as London, where the median price exceeds £500,000. Critics argue that the tax would disproportionately affect middle-class families who have paid off their mortgages, undermining intergenerational wealth transfer.
Reform UK has demanded that Burnham reconsider the plan, warning it could "destroy the inheritance of millions of people." The party's analysis suggests that even in Burnham's own constituency, the average impact would be around £50,000, contradicting his previous commitment to the 'Makerfield Test'—a principle that policies should benefit his working-class constituents.
Social Care Funding Context
The proposed tax is part of broader efforts to address the UK's social care crisis, which has been exacerbated by an aging population and rising costs. Burnham has long championed social care reform, and his government is expected to unveil a comprehensive plan in the coming days. However, the inheritance tax proposal remains highly contentious, with opposition parties and some within Labour expressing concerns about its economic and political ramifications.
McFadden acknowledged the need for a sustainable solution but declined to provide specifics, stating that Burnham's forthcoming speech would outline his vision. The debate over funding social care is likely to dominate political discourse in the weeks ahead, as the government seeks to balance fiscal responsibility with public demand for improved care services.
