Andy Burnham is preparing his bid for No. 10 after returning to Parliament as a Labour MP.
Burnham is “widely considered a frontrunner”, said The Independent, but now that Keir Starmer has announced his resignation, there are still a couple more weeks for other leadership candidates to throw their hats in the ring.
Some voters, though, are “terrified”, said The Sun, at what a perceived “hard-left Burnham government will do to their bank balances”.
Tax
Labour’s manifesto promise not to increase the rates of income tax, VAT or employee national insurance contributions “will stay”, said The Times, but Burnham has suggested he would raise the £12,570 tax-free personal income allowance for workers.
The former Greater Manchester mayor told the BBC’s Question Time that the personal allowance had been a topic raised “on so many doorsteps” and that, as a result, he would be willing to “have a proper look at this” to develop policy.
Inheritance tax changes “could also be a possibility”, said MoneyWeek, highlighting that, as health secretary in 2009, Burnham suggested a flat 10% charge applied to all estates, “with the money being used to fund social care for all”.
And, in a move that will “terrify middle England”, said The Sun, he has floated reintroducing the “hated” 50p top rate of tax.
Property taxes
Burnham has also “shown enthusiasm for taxing wealth more heavily”, said IFA Magazine.
Writing for The Guardian in 2010, Burnham proposed a land value tax on the market rental value of land. He argued this would “allow for the abolition of stamp duty”.
Such a move would “discourage land hoarding and encourage productive development”, said Tembo Money, but it could raise “legitimate concerns about fairness” for “asset-rich, income-poor homeowners” who might find it difficult to meet higher annual bills.
Mortgages
The credibility of Burnham in the markets, said Sky News, “will matter most for our borrowing costs”.
Burnham has sought to reassure bond investors that he will stick to the government’s existing fiscal rules. But if doubts were to emerge in markets, “mortgage borrowers could be among those to feel the consequences”, said the Financial Times.
Any massive spending plans outlined by Burnham could “trigger a bond market meltdown”, said The Sun, which would push fixed mortgage rates up.
Pensions
In good news for pensioners, Burnham has “reaffirmed the government’s commitment to the triple lock”, said Morningstar, despite “intense scrutiny” of the policy.
But he could use changes to pension tax relief or reductions in the pension tax-free lump sum as a “means of targeting wealth, and raising revenue, without deploying headline wealth taxes”.
The importance of the chancellor
The “choice of chancellor” will also influence how bond markets react, said The Independent. Currently, Rachel Reeves is seen “as stable, consistent and predictable – all things the market likes”.
A chancellor with a “reputation for fiscal discipline” might “reassure markets”, said MoneyWeek, but a “less disciplined” candidate “could have the opposite effect”.
The Labour leadership favourite is expected to put his own stamp on taxes, pensions, and more
