Andy Burnham’s latest speech today points to a much broader economic direction than constitutional devolution alone, according to leading tax adviser Sean Bannister, Head of Tax at Edwin Coe LLP. While much of the political commentary has focused on the transfer of powers away from Westminster, Bannister suggests the real significance lies in the potential reshaping of UK tax and economic policy, with important implications for advisers and their clients.
What Andy Burnham’s speech could mean for client planning
Sean highlights the prospect of greater regional fiscal autonomy, alongside early-stage ideas around reforming capital gains tax, property taxation and inheritance tax, as signals of a more interventionist approach to wealth and investment.
While still speculative, these proposals raise key planning considerations for advisers, particularly around complexity, regional divergence and the future coherence of the UK tax framework.
“Whilst today’s headlines have centred on moving political power out of Westminster, the proposals go much further than devolution.
Andy Burnham in power would likely lead to a fundamental reshaping of how the UK economy is managed in a more interventionist manner, and that means some pretty significant implications for how investment is encouraged and how wealth is taxed.
It’s about much more than the location of government departments. Greater fiscal powers for regions could mean different approaches to taxation, investment incentives and economic policy across England.
That clearly creates opportunities for regions to compete and innovate, but at the same time risks adding complexity for businesses operating nationally if the framework is not carefully designed.
When it comes to individuals, Burnham appears to be leaning towards taxing wealth more heavily, including aligning capital gains tax more closely with income tax, replacing council tax and stamp duty with a proportional property or land value tax, and potentially reforming inheritance tax.
Whilst these ideas remain at an early stage, they do signal a willingness to revisit parts of the tax system that have remained largely unchanged for years, although we will definitely see some pushback from certain parts of the population.
The speech should be seen as part of a much broader economic programme rather than simply a constitutional reform designed to grab the media’s attention.
The key questions over the coming months will be how these proposals are funded, how regional powers interact with national tax policy, and whether the government can deliver greater local autonomy without creating additional complexity for businesses and taxpayers.”
