The Compass Burnham wealth tax plan sits at the heart of a 230-page policy document published ahead of Chancellor John Healey’s first budget this autumn, setting out what a genuinely left-of-centre government might do if it dared.
The report, Ending Business as Usual, brings together contributions from 17 organisations, according to Compass’s own publication page, though the document has also been characterised as the work of 15 thinkers. Either way, the scale is substantial: 70 policy options covering tax, social care, energy, housing, and the constitution.
The Burnham Wealth Tax Plan and What It Would Raise
The centrepiece tax proposal comes from Caitlin Boswell, Head of Advocacy and Policy at Tax Justice UK. She argues for a levy on net assets above £10 million, which she estimates would raise roughly £24 billion a year. The Burnham wealth tax plan, as framed here, would sit alongside a separate move to equalise capital gains tax with income tax, projected to raise a further £11.3 billion annually, enough, the report argues, to fund the building of 90,000 new social homes.
The Institute for Fiscal Studies has cautioned that equalising capital gains tax with income tax risks reducing total tax revenue and investment, and could prompt wealthy individuals to move assets or relocate abroad. That is a real tension the report does not fully resolve.
What may give the proposals more political traction than usual: a Tax Justice UK survey found that 76% of UK millionaires support a 2% wealth tax on assets above £10 million. That is a harder number for opponents to dismiss than a think-tank wish list normally provides.
Social Care, Energy and a Crumbling Council Tax
On social care, Sebastian Rees, a Principal Research Fellow at the Institute for Public Policy Research (IPPR) who leads the organisation’s health work, calls for free personal care in England, covering washing, dressing and eating, funded partly by a 1% income tax surcharge on those aged over 40. That surcharge would raise between £8 billion and £9 billion a year. Additional costs would be secured against property and recovered after sale or death, allowing housing wealth to contribute without forcing anyone to sell their home at the point of need.
The demographic case is stark. IPPR research projects that the number of people over 65 in the UK will grow by 33% over the next decade, against just a 2% increase in the working-age population, while the number of over-85s will nearly double. Scotland already operates a free personal care model; the report argues England cannot afford to keep deferring the question.
Approximately half of all people formally receiving social care in England currently finance at least part of it privately, a proportion that has been growing. The reform would end that.
On energy, Chris Hayes from Common Wealth argues for government-owned companies to run energy networks alongside a network of regional energy boards. The report also calls for abolishing the council tax, which it describes as ‘regressive, outdated and unfair’, replacing it and stamp duty with a proportional property tax. Around 23% of households, concentrated in London and the south-east, would pay more under such a system.
Devolution, the Lords, and the Political Gamble
The document extends into constitutional territory. It proposes a £50,000 cap on political donations and the abolition of the House of Lords. A chapter co-authored by PolicyWISE Director Dewi and Professor Michael Jacobs, noted by PolicyWISE, recommends new approaches to intergovernmental relations and greater symmetry in fiscal and legislative powers across devolved institutions, including less restrictive borrowing powers for devolved governments.
Introducing the report, Jacobs, a professor of political economy at the University of Sheffield and former adviser to Gordon Brown, and Neal Lawson, Compass director and a close associate of Burnham, praise the prime minister’s ‘invaluable aura of authenticity’. The warning that follows, though, is pointed: there is ‘no guarantee that he will be given any longer to deliver results than his immediate predecessor’.
Jacobs puts it plainly: ‘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.’
The Tax Research UK blog has described the 230-page document as serious rather than performative. Whether Burnham treats it as a menu or a manifesto will be the first real test of what his government actually intends.
