”Breathing space is welcome, but Burnham’s ten-year plan must be when Britain changes’

Since entering Downing Street, Andy Burnham has moved quickly. VAT is coming off household electricity bills, business rates are being cut for pubs, and a £2 cap on bus fares is on its way. These measures are welcome, but as the new Chancellor put it at the cabinet table on Tuesday, they give households some breathing room without solving the cost-of-living crisis.

They offer glimpses of what the Prime Minister has promised, life essentials back within reach and the biggest transfer of power out of Whitehall in modern times. But relief at the margins is what every recent government has reached for. The real test is the ten-year plan promised for later this year, and whether it is genuinely bold structural reform, and grounded in a long-term vision for the sort of Britain we collectively wish to build.

Burnham is the seventh prime minister since 2016, and every predecessor inherited the same problem. A state that costs more each year while delivering less, and a 10-million-word tax code so encrusted with reliefs and cliff edges that nobody will be brave enough to rip it up and start again. If there is one lesson he can learn from his predecessors, it’s that incremental change is a tried and tested method for a short stint at the top. If this government is to be different, its plan must treat tax, devolution, bills and welfare as one reform, not four departmental workstreams.

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An overhaul of the tax code is long overdue. Britain taxes income six different ways, marginal rates lurch as high as 62% while wages carry the load. The answer is not another relief or another levy, but to simplify and widen the base. One option we have researched at the Global Institute for Prosperity is to fold income tax, National Insurance and taxes on capital into a single progressive levy that cuts the bill for nearly three quarters of full-time workers relying only on their wages. A new nurse, teacher or police constable would keep several hundred pounds more a year. That is what a progressive tax cut for working people could look like.

Simplification would also enable the sort of devolution Burnham has built his politics on. He knows the difference between devolved delivery and devolved power, English local government spends money Whitehall controls, and its one real tax, Council Tax, is still based on 1991 valuations and falls hardest on the most modest homes; for example,  a mansion in Mayfair pays less than a three bedroom house in Hull.

Replacing both Council Tax and Stamp Duty with a simple annual tax of 1% of a property’s value, paid straight to local government, would give mayors and councils money of their own to raise and spend, in every part of the country and solve the gridlock that exists in our housing market.

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Household bills need the same structural treatment. Taking VAT off electricity saves a typical household around £45 over six months, but the standing charges, policy levies and network debt costs that keep bills high will still be there in April, when the cut expires. If essentials are to come back under public control, the plan must change how energy, water and transport are charged for, not just who pays the tax on top.

Welfare belongs in the same conversation. A system that pays nearly a million young people to remain outside education, employment and training, then sanctions them for it, serves nobody. Burnham must find a way to get this generation working in meaningful jobs.

The objection to major structural reform has always been affordability and already we have seen a wave of cries of how will Burnham pay for this. To those doubters I point to what Beveridge achieved in 1942. There are ways to make this work, our plan, Prosperity 2030, for example, is fully costed across 30 policies, requires no new borrowing, and leaves £38 billion a year of headroom for the government’s own priorities.

Burnham is right that households need breathing space in the immediate term. But breathing space is what you offer while you decide on the treatment. This autumn, we will hopefully find out whether he intends to treat the condition and has a radical plan that is bold enough to overcome Britain’s long-term structural challenges.

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