A coalition of 15 influential left-leaning thinkers has called on Prime Minister Andy Burnham to tackle inequality through sweeping reforms including a wealth tax, universal free personal social care, and bringing energy networks under state control. The Compass thinktank has compiled 70 policy options designed to deliver on Burnham's promise to end business as usual, with Chancellor John Healey's first budget scheduled for 28 October providing a concrete fiscal timetable for potential implementation.
Michael Jacobs, a former adviser to Gordon Brown and professor of political economy at the University of Sheffield, and Neal Lawson, director of Compass and a close ally of Burnham, frame the proposals as urgent. They praise what they describe as the prime minister's "invaluable aura of authenticity" but caution that
there is no guarantee that he will be given any longer to deliver results than his immediate predecessor. The authors contend that
it is simply not the case that a British government can no longer govern from the left of centre.
Burnham has previously signalled openness to wealth taxation. According to reporting on a July podcast, he said he wanted time before deciding on a wealth tax but did not rule it out. This stance reflects broader tension within the government: while Healey has signalled he will stick to Labour's manifesto pledges not to raise taxes on working people, the chancellor faces pressure from both the left and campaign groups to pursue revenue-raising measures.
What tax reforms does the Compass report propose?
The Compass package, titled Better! and described as containing 100 recommendations for Burnham's first 100 days, centres on a radical overhaul of the tax system. At its core is a wealth tax on net assets exceeding £10 million. According to Caitlin Boswell from Tax Justice UK, such a levy would raise approximately £24 billion annually, though the precise revenue depends on the tax rate applied. The Compass proposal specified a 2% levy affecting about 22,000 people, while Oxfam and Tax Justice UK have also called for a 2% annual levy on assets over £10 million in Budget discussions.
Boswell argues that
if the new Labour government is serious about rebuilding public confidence and delivering material improvements to people's lives, it must be prepared to address one of the structural causes of inequality: a tax system that favours wealth over work.
The report also proposes equalising capital gains tax with income tax, a move estimated to raise £11.3 billion annually—sufficient, according to the authors, to fund construction of 90,000 new social homes. However, critics warn that such a change could lower total tax revenue and investment, and might prompt wealthy individuals to relocate their assets or leave the country.
A further proposal would replace what the report describes as the "regressive, outdated and unfair" council tax and stamp duty with a proportional property tax. The authors acknowledge that this shift would result in 23 per cent of households—concentrated in London and the south-east—paying more. The Compass package also includes a 100 per cent tax on second-home purchases to fund state-owned affordable housing, and a £50,000 cap on political donations.
What social policy changes are recommended?
On social care, the report calls for universal free personal social care, funded through a surcharge on income tax for people aged over 40, combined with a contribution from housing wealth. Sebastian Rees from the Institute for Public Policy Research argues that personal care needs—such as washing, dressing and eating—should be covered by the state, with accommodation and ordinary living costs remaining the responsibility of individuals and their families, mirroring the model currently operating in Scotland.
A 1 per cent income tax surcharge for the over-40s would generate between £8 billion and £9 billion, according to the report. The proposal also suggests that care costs could be secured against property and recovered after sale or death, which Rees says would
allow housing wealth to contribute to the cost of reform without requiring people to sell their home when they first need care.
Beyond social care, the report advocates for universal free childcare, arguing it would
boost the economy, support children's development, help families and promote gender equality. Other institutional reforms include abolition of the House of Lords and an immediate cost of living package.
What energy and infrastructure proposals are included?
Chris Hayes from Common Wealth calls for government-owned companies to operate energy networks and for the establishment of regional energy boards. Holly Brazier Tope, director of politics at Green Alliance, advocates for a climate resilience standard for critical infrastructure. These proposals reflect a broader push toward public ownership of utilities, a theme that has gained traction among sections of the Labour left.
What is the political context?
Jacobs warns that Burnham and Healey must resist pressure to conform to what he calls the
moderation and orthodoxythat he argues ended the tenures of Keir Starmer and Rachel Reeves.
There are a wealth of alternatives, he states.
As Burnham knows, the public is disillusioned with politics and angry with their politicians. He does not have long to prove to voters that, when he says he wants to end business as usual, he means it.
The Compass report frames its 70 options as
a menu of policy options, not a manifesto, giving the government flexibility in which proposals to pursue. However, the tension between the left's ambitions and the government's stated commitment to fiscal restraint and manifesto pledges remains unresolved. The chancellor faces a bind: coverage on 5 September highlighted tension between growth messaging and leftwing tax demands, with debate over whether to back revenue-raising measures such as a windfall tax on banks.
What happens next?
The 28 October Budget will be the decisive moment. Healey is expected to set out his first full tax and spending package, and the extent to which he incorporates Compass proposals—or similar wealth-focused tax measures—will signal the government's true priorities. Burnham's position on a wealth tax remains under active consideration, and the Budget will reveal whether the government is prepared to embrace the kind of structural tax reform the thinktank advocates.
Key Facts
- Compass proposes a 2% wealth tax on assets above £10 million, estimated to raise £24 billion annually and affecting approximately 22,000 people
- The report recommends equalising capital gains tax with income tax to raise £11.3 billion per year, enough to fund 90,000 new social homes
- Free personal social care would be funded by a 1% income tax surcharge on over-40s, raising £8–9 billion annually, with costs recoverable against property
- Chancellor Healey's first Budget is scheduled for 28 October, providing the fiscal timetable for potential implementation of these proposals
- Burnham has not ruled out a wealth tax but has indicated he wants time to consider the measure before making a decision
