Andy Burnham is in a tight spot but a sales tax won’t save him (Image: Getty)
Labour is having kittens over what Healey is going to announce on October 28. How the Budget lands with the public could make or break Andy Burnham’s strategy, which is to generate a bit of optimism, then call a snap election to take advantage of Zack Polanski’s Green Party meltdown and the Tory-Reform split on the right. There’s a huge amount at stake.
We all know what Burnham would like Healey to do. Hike more taxes, borrow more money, then chuck the lot at voter-friendly pledges, such as building council houses, solving social care and maybe even buying some bullets for the army to show Vladimir Putin we mean business. But Healey can’t do that. He can’t do anything.
When the Cabinet assembles these days, it’s a glum affair, as Healey kills the post-Makerfield feelgood factor by banging on and on about dreary old “fiscal discipline”. He knows Labour can’t keep tapping up taxpayers, and we definitely can’t keep tapping up the bond market. Which makes ministers wonder why they joined the Labour Party in the first place. If they can’t go on a spree, they might as well be Tories.
Healey is reluctant to launch a third Labour tax blitz, having seen what the first two did to Rachel Reeves‘s career trajectory. Reform UK has warned he’s lining up a £30billion “sucker punch”, and he doesn’t want that on his CV. But Labour still demands he raises more money, and he has to oblige.
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Options include slapping a bigger windfall tax on banks and oil giants, unleashing new property levies and hiking capital gains tax. Both could backfire, by driving business away. Now left-wing think tank the Institute for Public Policy Research, which has close links to Labour, has had a new brainwave. It’s urging Healey to slap a brand new targeted 2% sales tax on online purchases. It reckons this could raise £1.5billion a year.
Many people would like the look of that. Isn’t time greedy US tech platforms such as Amazon paid their share? They’re a key reason why your high street is boarded-up, although not the only one. Traditional retailers pay business rates on their premises, which online-only rivals largely escape. The tax could fund business rate cuts for pubs, shops, hotels, reviving high streets.
But there are downsides. Bosses at UK retailers like John Lewis and Marks & Spencer’s are worried because they sell plenty of stuff online too. An online sales tax could punish the very retailers it’s supposed to help. It could hit small businesses too.
There’s another issue. Who pays? Ultimately, you will. Retailers could absorb some of the cost, but with profit margins already tight, most will simply pass the tax onto shoppers.
The tax will strike every time you buy anything online. Just open your laptop, scroll on your phone, click Buy and bam! HMRC wins, you lose.
There’s another problem. There is zero chance this tax will stop at 2%. Like so many other levies, once it’s in place, it’ll become yet another stealthy way for cash-strapped chancellors to raise a bit more cash come Budget day, hoping that we won’t really notice. And with this one you don’t even have to leave the house.
Andy Burnham Is So Desperate He Could Start Taxing Us Before We’ve Even Left the House
Andy Burnham is facing another wave of political criticism as the debate over taxation, transport costs and the cost of living intensifies across Britain. The accusation that he could end up taxing people before they have even left their homes captures a growing frustration among households that feel they are being asked to pay more while struggling to make ends meet.
For many families, the problem is not one individual tax or bill. It is the combined pressure of council tax, energy costs, fuel, insurance, food prices and the expense of getting to work. When politicians discuss new revenue-raising measures, even proposals that appear modest on paper can provoke an angry response from people who believe their budgets have already been stretched too far.
The headline is deliberately provocative, and the suggestion that Burnham might tax people before they leave home should not be taken as a literal policy announcement. The underlying political question is more serious: how far can governments increase charges or introduce new taxes before households begin to feel that ordinary life is becoming unaffordable?
That question is especially sensitive when political leaders promise better public services while simultaneously facing pressure to control spending. Voters want reliable transport, functioning public services and safer communities, but many are also demanding that ministers explain how those improvements will be paid for.
Why the tax debate is becoming so sensitive
Taxation is rarely judged in isolation. A household may be able to absorb one additional expense, but several increases arriving together can have a very different effect.
A commuter might pay more for fuel, face a higher insurance renewal and discover that household bills have increased again. A family with children may also have to cover school expenses, rent or mortgage payments and rising food costs. Retired people on fixed incomes can find it particularly difficult to adjust when regular expenses increase faster than their available income.
In that environment, a proposal that appears manageable to a policymaker may feel entirely different to someone balancing a household budget.
Criticism of Burnham reflects a wider concern that governments sometimes focus on the revenue they need without sufficiently explaining the cumulative burden on taxpayers. Opponents argue that public authorities should examine waste, prioritise spending and demonstrate that existing resources are being used effectively before asking residents to contribute more.
Supporters of higher taxes can make a different argument. Public services require funding, and insufficient revenue can lead to deteriorating infrastructure, longer waiting times and reduced support for vulnerable people. If the government wants to improve services, it must identify a credible way to pay for them.
Neither argument removes the need for scrutiny. The important questions are what a proposed tax would fund, who would pay it, how much it would raise and whether the benefits would justify the cost.
The controversy becomes particularly intense when those details are unclear or when politicians appear to announce ambitions before explaining the financial consequences.