Sir Desmond Swayne is Member of Parliament for New Forest West.
Andy Burnham’s march towards Downing Street has been greeted in some quarters of the Labour Party with champagne and choruses of hope. Businesses operating in the real world, however, are left staring at something far less comforting: a cloud of uncertainty over what the next Prime Minister intends to do with the tax system that underpins our economy and any prospect of recovery.
Having been an MP for nearly 30 years, I have seen many Chancellors and Prime Ministers come and go. I have learnt that what markets, investors and employers often fear most is not a particular tax rate, but not knowing what lies around the corner.
In his speech at the People’s History Museum in Manchester, Burnham promised “good growth in every postcode”. There was much in the speech about devolution, renewal and reindustrialising Britain. Yet for businesses trying to plan for the next three to five years, the crucial questions remain unanswered. What will happen to Capital Gains Tax? Will employment taxes rise again? Are wealth and property taxes still on the table? Will business rates reform reduce the burden on enterprise, or simply shift it elsewhere? The speech may have offered a slogan for growth, but it did not provide the certainty that growth requires.
Uncertainty on this scale is not victimless. When a manufacturer in the Midlands cannot predict his tax position three years hence, he delays that new production line. When a family‑owned firm hears whispers of new capital taxes, it quite rationally sits on its hands. The result is a slow, steady choking of growth.
Foreign investors have grown wary, and surveys show fiscal uncertainty now ranks among the top concerns for British businesses of all sizes. At a time when growth is anaemic and productivity stubbornly weak, this is the one thing we cannot afford.
Burnham’s rhetoric hardly helps. He has sought to reassure the bond markets that he will abide by Rachel Reeves’ fiscal rules, while voices close to him have argued for a more flexible approach to investment borrowing. He speaks warmly about reindustrialising the country and cutting business rates for pubs and music venues, while continuing to leave open bigger questions about nationalising utilities, reshaping local taxation and increasing levies on wealth and assets. I am not the first to point out that there seem to be several Burnhams depending on the audience: a sober technocrat for the City, a reforming mayor for the regions, and a class warrior for the activists. Businesses are left wondering which Burnham will turn up at the Budget.
It is entirely possible he proves worse for enterprise than his predecessor. Sir Keir Starmer’s government at least dressed its tax rises in the language of restraint. Burnham’s brand of politics appears more improvisational, more tempted by the sort of sweeping “reforms” that look good on a conference platform but wreak havoc on investment plans.
That is why the growing pushback from business matters. Helm, a members’ group for scale-up founders, has launched a new campaign called Stop the Creep, urging the government to ease the growing tax burden on British companies. Over 100 businesses and politicians have already backed its calls. They are not demanding special treatment; they are simply asking that those who create jobs and wealth are not treated as an inexhaustible cash machine.
Burnham now has an opportunity to show that a government serious about growth will not keep asking entrepreneurs to pay for every fiscal shortfall.
He should instead rule out further tax increases on employment and enterprise this Parliament. He should guarantee that he will not align Capital Gains Tax with income tax, nor introduce ad hoc levies dressed up as “fairness”. He should also commit to phasing in any structural reforms gradually, with full consultation.
If Burnham wants to prove he understands business, he should start by giving those who create jobs the one thing they need most: confidence that success will not be punished.
Sir Desmond Swayne is Member of Parliament for New Forest West.
Andy Burnham’s march towards Downing Street has been greeted in some quarters of the Labour Party with champagne and choruses of hope. Businesses operating in the real world, however, are left staring at something far less comforting: a cloud of uncertainty over what the next Prime Minister intends to do with the tax system that underpins our economy and any prospect of recovery.
Having been an MP for nearly 30 years, I have seen many Chancellors and Prime Ministers come and go. I have learnt that what markets, investors and employers often fear most is not a particular tax rate, but not knowing what lies around the corner.
In his speech at the People’s History Museum in Manchester, Burnham promised “good growth in every postcode”. There was much in the speech about devolution, renewal and reindustrialising Britain. Yet for businesses trying to plan for the next three to five years, the crucial questions remain unanswered. What will happen to Capital Gains Tax? Will employment taxes rise again? Are wealth and property taxes still on the table? Will business rates reform reduce the burden on enterprise, or simply shift it elsewhere? The speech may have offered a slogan for growth, but it did not provide the certainty that growth requires.
Uncertainty on this scale is not victimless. When a manufacturer in the Midlands cannot predict his tax position three years hence, he delays that new production line. When a family‑owned firm hears whispers of new capital taxes, it quite rationally sits on its hands. The result is a slow, steady choking of growth.
Foreign investors have grown wary, and surveys show fiscal uncertainty now ranks among the top concerns for British businesses of all sizes. At a time when growth is anaemic and productivity stubbornly weak, this is the one thing we cannot afford.
Burnham’s rhetoric hardly helps. He has sought to reassure the bond markets that he will abide by Rachel Reeves’ fiscal rules, while voices close to him have argued for a more flexible approach to investment borrowing. He speaks warmly about reindustrialising the country and cutting business rates for pubs and music venues, while continuing to leave open bigger questions about nationalising utilities, reshaping local taxation and increasing levies on wealth and assets. I am not the first to point out that there seem to be several Burnhams depending on the audience: a sober technocrat for the City, a reforming mayor for the regions, and a class warrior for the activists. Businesses are left wondering which Burnham will turn up at the Budget.
It is entirely possible he proves worse for enterprise than his predecessor. Sir Keir Starmer’s government at least dressed its tax rises in the language of restraint. Burnham’s brand of politics appears more improvisational, more tempted by the sort of sweeping “reforms” that look good on a conference platform but wreak havoc on investment plans.
That is why the growing pushback from business matters. Helm, a members’ group for scale-up founders, has launched a new campaign called Stop the Creep, urging the government to ease the growing tax burden on British companies. Over 100 businesses and politicians have already backed its calls. They are not demanding special treatment; they are simply asking that those who create jobs and wealth are not treated as an inexhaustible cash machine.
Burnham now has an opportunity to show that a government serious about growth will not keep asking entrepreneurs to pay for every fiscal shortfall.
He should instead rule out further tax increases on employment and enterprise this Parliament. He should guarantee that he will not align Capital Gains Tax with income tax, nor introduce ad hoc levies dressed up as “fairness”. He should also commit to phasing in any structural reforms gradually, with full consultation.
If Burnham wants to prove he understands business, he should start by giving those who create jobs the one thing they need most: confidence that success will not be punished.