Burnham urged to tackle inequality with policies including wealth tax

Key thinkers suggest other radical measures in Compass report such as free personal social care and abolishing Lords

Andy Burnham should tackle inequality in the UK by introducing a wealth tax, universal free personal social care and bringing gas and electricity networks under public ownership, according to a report from more than a dozen influential thinkers.

In the lead-up to the first budget of the chancellor, John Healey, this autumn, the Compass thinktank has collated 70 policy options from 15 leftwing thinkers that they argue would deliver on the prime minister’s promise to end 40 years of neoliberalism .

Introducing the report, Ending Business as Usual , Michael Jacobs, a former adviser to Gordon Brown, and Neal Lawson, director of Compass and a close friend of Burnham, praise what they call the prime minister’s “invaluable aura of authenticity”.

However, they warn that while he has ambitious plans “there is no guarantee that he will be given any longer to deliver results than his immediate predecessor”. The authors argue that it is “simply not the case that a British government can no longer govern from the left of centre”.

Among the policy proposals, which the organisation states is “a menu of policy options, not a manifesto”, are a £50,000 cap on political donations, the abolition of the House of Lords and an immediate cost of living package.

The plans also include a raft of far-reaching tax policies, including the introduction of a wealth tax on net assets of more than £10m, which would raise about £24bn a year, according to Caitlin Boswell from Tax Justice UK.

Other mooted policy ideas include equalising capital gains tax with income tax, which would raise a further £11.3bn a year – enough “to fund the building of 90,000 new social homes”. The Institute for Fiscal Studies has argued such a move would risk lowering total tax revenue and investment, and lead wealthy individuals to move their money or leave the country.

The essay also calls for what it describes as the “regressive, outdated and unfair” council tax as well as stamp duty to be replaced with a proportional property tax, noting such a move would result in 23% of households – concentrated in London and the south-east – paying more.

“If the new Labour government is serious about rebuilding public confidence and delivering material improvements to people’s lives, it must be prepared to address one of the structural causes of inequality: a tax system that favours wealth over work,” writes Boswell.

Suggested social policy changes in England include introducing free personal social care, paid for by a surcharge on income tax rates for people aged over 40, and a contribution from housing wealth. Sebastian Rees, from the Institute for Public Policy Research (IPPR) argues that personal care needs, such as washing, dressing and eating should be covered by the state with accommodation or ordinary living costs, remaining the responsibility of the individual and their family, a model currently in place in Scotland.

Stating that a 1% surcharge on income tax for the over-40s would raise between £8bn and £9bn, it also argues that care costs could be secured against a property and recovered after sale or death. This would “would allow housing wealth to contribute to the cost of reform without requiring people to sell their home when they first need care,” says Rees. Elsewhere, the report calls for universal free childcare, which it argues would “boost the economy, support children’s development, help families and promote gender equality”.

Chris Hayes, from Common Wealth, calls for government-owned companies to be put in charge of running energy networks, as well as the setting up of regional energy boards, while the director of politics at Green Alliance, Holly Brazier Tope, argues for a climate resilience standard for critical infrastructure.

Michael Jacobs, professor of political economy at the University of Sheffield, said Burnham and his chancellor must resist pressure to conform to the “moderation and orthodoxy” that he argues ended the tenures of Keir Starmer and Rachel Reeves.

“There are a wealth of alternatives,” he says. “As Burnham knows, the public is disillusioned with politics and angry with their politicians. He does not have long to prove to voters that, when he says he wants to end business as usual, he means it.”