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Burnham urged to replace income tax and NI with a single levy

An open letter backed by economists says the plan, with a single “national contributions” charge, could raise an additional £75.0bn a year within five years to fund universal services.

Reported · Written up by our desk · Europe

Guardian Economics reports that prominent economists, including Jim O’Neill, have urged Andy Burnham, expected to take over from Kier Starmer on 20 July, to pursue a radical overhaul of UK taxes and public spending.

In an open letter, the economists argue that Britain faces rising taxes alongside deteriorating public services, and they point to debt interest costs of £100.0bn a year, described as larger than the defence budget and about half of NHS spending.

Their proposal, tied to a report from the Institute for Global Prosperity, would replace six major taxes, including income tax, capital gains tax, inheritance tax and national insurance contributions, with a single levy on all income, whether earned from work, asset sales, or estates.

The report’s authors say that depending on the levy rate, the change could generate an additional £75.0bn a year within five years, and they call for proceeds from the overhaul, alongside items such as a trebling of air passenger duty, to support universal services such as free bus services and free lunches for all primary schoolchildren.

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