Burnham's top ally calls for 'fundamental redesign' of the tax system ahead of his economic strategy speech
Ms Haigh ran Mr Burnham’s Makerfield campaign and is expected to take a senior cabinet role
A top ally of Andy Burnham has called for a hike in capital gains tax and a relaxation of the fiscal rules ahead of his speech on economic strategy on Monday.
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Louise Haigh, who ran Mr Burnham’s Makerfield campaign, stressed there must be a "fundamental redesign" of the country's tax system, including bringing capital gains tax (CGT) "closer” to income tax.
“[These changes] would shift the taxation burden away from punishing work, and towards unproductive capital accumulation, which does little to grow the everyday economy," she said.
Ms Haigh, who is expected to take a senior cabinet role, said that the move should be accompanied by measures like inflation indexation to "ensure that genuine investment returns are not unduly penalised”.
The former Transport Secretary is also pressing for the Treasury to be dismantled, alongside the loosening of fiscal rules to allow Britain’s National Wealth Fund – worth around £27.8bn – to borrow against its existing balance sheet.
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Other suggestions include re-examining the Bank of England’s mandate to allow for a “greater focus” on economic growth, reducing council tax for some homes, and replacing stamp duty with a new annual national property and land tax.
Ms Haigh is considered a strong influence in devising Mr Burnham's domestic policy agenda, and her suggestions have raised concern that markets could be spooked over the potential for higher tax and more borrowing.
Her comments come ahead of Monday's speech by newly appointed MP, Andy Burnham, who will set out his economic strategy in his first major policy announcement since Sir Keir Starmer’s resignation on Monday.
Reports suggest some of the proposals shared by Ms Haigh in the Left-wing magazine Renewal are supported by allies of Mr Burnham.
The current fiscal rules imposed by Chancellor Rachel Reeves place tight constraints on government borrowing, ensuring day-to-day spending is matched by tax revenues, so the Government is only borrowing to invest.
The Government is also required to reduce net financial debt as a share of the economy.