Louise Haigh, who served as Andy Burnham’s campaign manager during the Makerfield byelection and is widely tipped for a senior cabinet position in his incoming government, has published a detailed economic programme calling for Capital Gains Tax to be aligned with income tax rates and the government’s fiscal rules to be relaxed to allow public institutions to borrow more freely.
The former transport secretary set out her proposals in an essay for the Renewal journal, describing the Treasury as “imperial” and arguing that Britain’s current tax system punishes work while allowing unproductive capital accumulation to accumulate largely untaxed.
The CGT proposal
The headline measure is a significant increase in Capital Gains Tax, which Haigh says “should be brought closer to income tax rates.” CGT currently sits at 18% for standard rate taxpayers and 24% for higher rate taxpayers. Income tax rates rise to 40% for higher earners and 45% at the top. Haigh’s proposal would mean capital gains on asset sales being taxed at up to 45% – a major shift from the current regime.
Her argument is framed explicitly in terms of fairness between different types of income. “This reform is central to restoring confidence that the system does not favour those able to structure their income over those earning through work. It would shift the taxation burden away from punishing work, and towards unproductive capital accumulation, which does little to grow the everyday economy.”
She also calls on government to address what she calls “intergenerational fairness” issues in the tax system – “characterised by numerous exemptions and reliefs” – and specifically names the CGT uplift at death, a loophole that allows unrealised gains to escape taxation entirely when assets are passed on.
Loosening the fiscal rules
The second major proposal concerns the fiscal framework that Burnham will inherit from Rachel Reeves. Haigh argues that certain public finance institutions – specifically citing the National Wealth Fund – should be permitted to borrow against their existing balance sheets outside the fiscal rules.
“This would separate long-term investments in areas like renewable energy from day-to-day government spending, and would alleviate the fiscal pressures experienced by the Exchequer,” she writes.
The proposal reflects a long-running debate within Labour about whether Reeves’s fiscal rules – designed to reassure bond markets after the Truss disaster – are unnecessarily restrictive. Burnham himself addressed this directly on Newsnight, discussing the fiscal rules question alongside Thames Water and public ownership. His land value tax commitment, which could raise £35bn, came with an explicit commitment to maintaining fiscal rules – making clear he wants to find revenue space within the framework rather than simply abandon it.
Haigh’s proposal to carve the National Wealth Fund out of the rules is a more targeted approach: not scrapping the framework but creating a category of investment spending that sits outside it, on the logic that long-term infrastructure investment is categorically different from day-to-day expenditure.
The ‘imperial Treasury’ critique
The most structurally ambitious part of Haigh’s essay may be her call to remove the “growth mandate” from what she calls the “imperial Treasury.” Britain’s Treasury has more concentrated power over economic policy than its equivalents in almost any comparable democracy – it controls spending, taxation, and macroeconomic strategy simultaneously, often leaving ministers in other departments frustrated.
“There is a reason why no other country in the world has such an imperial finance department as we do,” she writes. “Despite ever more presidential politics, we have an underpowered Downing Street, in which the Prime Minister needs the agreement of the Chancellor to push ahead with the priorities on which they were elected.”
The argument is essentially that Burnham – whoever he appoints as chancellor – needs to ensure the Treasury serves the government’s agenda rather than constraining it. This framing is significant in the context of the Reeves/Miliband rift over North Sea drilling: Reeves’s Treasury-centric approach to energy policy repeatedly clashed with Miliband’s departmental priorities, and Haigh appears to be signalling that the relationship between No 10, No 11 and the spending departments needs to be restructured.
The chancellor context
Haigh’s essay arrives as the contest for the Treasury brief intensifies. Unison backed Miliband as chancellor, citing his willingness to “rewire the economy.” GMB and Unite have been working to block his appointment, with concerns about his North Sea and net zero policies. Lucy Powell, Labour’s deputy leader, told Kuenssberg’s programme on Sunday that she did think Miliband would be a good chancellor – while describing the conversation as a “distracting” from the government’s core economic mission.
Reeves appears to have accepted she will not remain as chancellor, though she told the British Chambers of Commerce that she hoped whoever succeeded her would “stick to what I’m doing, because it is beginning to bear fruit.”
Healey’s resignation letter accused Starmer and Reeves of putting national security at risk through spending choices – a broader indictment of the fiscal framework from a different angle. The question of whether the Treasury framework needs reform, or simply better management, is now one of the central arguments of Burnham’s transition.
What Haigh is signalling
Haigh’s essay reads as the opening statement of a Burnham economic agenda, written by someone who will likely help implement it. The combination of CGT alignment, fiscal rule relaxation for capital investment, and Treasury reform is explicitly supply-side: it is about raising revenue from wealth rather than work, freeing up the state to invest for growth, and restructuring the machinery of government so that the prime minister can actually pursue the priorities they were elected on.
These are not fringe positions in the Labour policy debate. They align with what economists including Mariana Mazzucato and Gary Stevenson have been arguing, and with Burnham’s own framing of an economy that has been in “40 years of neoliberalism.” Whether Burnham has the political will to pursue them, and whether the chancellor appointment he makes signals a Treasury willing to embrace them, will be the defining question of his first weeks in office.
One response to “Top Burnham ally calls for Capital Gains Tax increase and looser fiscal rules to fund public investment”
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Typical left wing hit those who have anything , election needed so decision can be made , personally I would start with MPs allowances and pensions instead of the normal working man
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