Submitted by Bill Fernie
14th July 2026
Whenever a new political party prepares for government, one question always follows close behind.
"How will it pay for its promises?".
That question has become particularly relevant following tax expert Dan Neidle's recent analysis of the options that could face an Andy Burnham-led government if it needed to raise around £4.7 billion a year in additional tax revenue.
Rather than making political predictions, Neidle examines something far more practical. Which taxes could realistically raise that amount of money once many of the biggest taxes have effectively been ruled out by political promises.
It is a fascinating exercise because it highlights just how few easy choices remain.
The Easy Tax Rises Have Already Been Used
For decades, governments have relied on a relatively small number of taxes to fund public spending.
Income Tax, National Insurance and VAT together account for much of the Treasury's income.
But modern politics has made those taxes difficult to increase.
Every major party understands that raising the basic rate of Income Tax or VAT is unpopular, while National Insurance increases often provoke strong opposition from both employees and businesses.
Once those options are removed, finding billions of pounds becomes much harder than many people imagine.
Small Taxes Rarely Raise Big Money
One of the most interesting messages from Neidle's analysis is that many taxes which receive enormous publicity actually generate relatively little revenue.
A new levy on a particular industry may make headlines, but unless it applies to a very large number of people or businesses it rarely raises billions.
Governments therefore find themselves looking again at the same familiar taxes because they are broad-based and reliable.
Where Might a Government Look?
Without reproducing the detailed analysis, the possibilities discussed include reforms to:
Capital Gains Tax.
Pension tax relief.
Inheritance Tax reliefs.
Higher rates of Income Tax for the highest earners.
Taxes affecting banks and some large businesses.
Property-related taxes.
Business rates.
None of these choices is politically easy.
Each has supporters who argue it makes the system fairer and critics who warn of unintended consequences such as discouraging investment, encouraging tax planning or reducing economic growth.
Scotland Adds Another Layer
For Scottish readers, the picture is even more complicated.
Scotland already has its own Income Tax system for earnings, with rates and thresholds that differ from those in England and Northern Ireland.
However, many of the taxes discussed remain reserved to Westminster.
That means future tax changes could affect Scotland in different ways depending on which tax was altered.
It also means Scottish taxpayers continue to live with two governments making tax decisions—Holyrood controlling some taxes while Westminster controls many others.
Understanding which parliament is responsible for which tax has become increasingly difficult for the average voter.
There Are No Cost-Free Choices
The reality is that every government eventually faces the same balancing act.
If spending rises faster than tax revenues, there are only a limited number of options.
Governments can:
Increase taxes.
Borrow more.
Reduce spending.
Hope stronger economic growth increases tax receipts.
Or use a combination of all four.
Each choice has consequences.
Higher taxes may slow investment or reduce incentives to work. Borrowing pushes costs into the future and increases interest payments. Spending cuts can affect public services. Relying on economic growth is attractive, but growth cannot simply be ordered into existence.
Note
This article discusses ideas and options raised by tax expert Dan Neidle in his analysis of possible tax changes under a future Andy Burnham government. It is an independent summary and discussion written for Caithness Business by Bill Fernie who several decades ago worked for HMRC. Readers interested in the detailed calculations and technical tax analysis should read Dan Neidle's original detailed article, which is linked below.
[url=https://taxpolicy.org.uk/2026/07/03/andy-burnham-tax-rises-47bn/]37 ways Andy Burnham could raise £4.7bn[/url]
Dan Neidle spent 25 years as a tax lawyer, and was head of tax at the London office of one of the largest law firms in the world. During his career, Dan advised corporates, governments, regulators, central banks and NGOs on tax and tax policy.
https://taxpolicy.org.uk/about/