Andy Burnham's first budget as Prime Minister is set to avoid raising capital gains tax to match income tax rates and will not introduce a wealth tax on those holding over £10 million, despite public demand for higher taxes on extreme wealth. The only tax increase on the wealthy involves raising the banking surcharge back to levels that existed before Conservative cuts in 2023. This comes as a surprise given Burnham's previous acknowledgement that the UK has 'overtaxed labour and undertaxed wealth' when he was mayor of Greater Manchester.
Research conducted by Tax Justice UK and the University of Strathclyde between February and July 2026 interviewed 30 politicians across Westminster, Holyrood and the Senedd to understand why wealth taxation remains politically difficult. The findings reveal that the barrier to taxing extreme wealth stems from a pattern of political fear, economic uncertainty, institutional capture and parliamentary self-preservation. The interviews covered all factions of the Labour party in Westminster and included conversations with MPs since the change in leadership.
Public opinion overwhelmingly supports wealth taxes on the super-rich, with polls showing that even three in five Reform-leaning voters back such measures. The UK's richest 50 families possess more wealth than half of the population, yet a billionaire-owned media apparatus actively cultivates opposition to wealth taxation by spreading narratives about billionaire flight and portraying wealth taxes as threats to ordinary homeowners rather than offshore holdings. Interviewed MPs acknowledged that when the City dislikes a policy, it can change views in Parliament in unhelpful ways, with one Labour politician stating: 'If the City doesn't like it then sometimes it can change views here in a way that's not helpful.'
Inside Parliament, structural pressures create personal paralysis among MPs. Backbenchers who privately support wealth taxes often remain silent for fear of losing local funding or party support for constituency improvements. One Labour MP admitted to keeping quiet for fear of losing a Pride in Place award for a deprived constituency. However, research revealed that if party leadership took a decisive stand on wealth taxation, most Labour MPs would fall in line behind it.
For borrowers, savers and businesses, the absence of wealth taxes means the tax burden continues to fall more heavily on labour and everyday economic activity rather than accumulated wealth. The research suggests that civil society pressure from the public is necessary to translate polling support into political action, as structural incentives inside Parliament are designed to manufacture caution rather than courage on this issue.