Burnham Is Proud to Be a Tax-and-Spend Socialist – But What Is Left to Tax or Spend?
Andy Burnham’s political identity has never been particularly difficult to understand. He has built his career around the idea that government should play a powerful role in people’s lives, that public services require sustained investment and that the state should be prepared to spend money to tackle inequality.
His supporters see that as a strength.
His critics see something very different: an old-fashioned tax-and-spend approach being presented as the answer to Britain’s modern problems.
And that raises a particularly uncomfortable question in today’s economic climate: how much more can the government realistically tax and spend?
Britain is not operating in an environment of unlimited resources. Public finances face competing demands from healthcare, pensions, education, defence, infrastructure and local government. Families and businesses are themselves dealing with high costs and economic uncertainty.
The argument, therefore, is no longer simply about whether taxation is good or bad.
It is about what taxpayers are getting in return.
The Tax-and-Spend Argument
For the political left, taxation is not necessarily a burden to be minimised. It is a mechanism through which society can pool resources and provide services that individuals cannot efficiently purchase on their own.
The NHS is the obvious example.
Supporters of higher taxation argue that healthcare, education, social care and infrastructure require collective investment. If government continually cuts taxes without reducing its responsibilities, the result can be deteriorating public services and greater inequality.
Burnham’s political philosophy fits comfortably within that tradition.
His supporters can reasonably argue that Britain’s problems did not appear because governments spent too much on everything. Some problems exist because governments have failed to invest sufficiently for the long term.
But the opposing argument is equally straightforward.
Every pound spent by government ultimately comes from somewhere.
It comes from taxation, borrowing, economic growth or some combination of the three.
Borrowing is not free money.
And taxation cannot endlessly rise without affecting households, investment, entrepreneurship and economic behaviour.
That is where Burnham’s critics believe his politics faces its greatest test.
There Is a Difference Between Taxation and Growth
One of the biggest mistakes in economic politics is to treat taxation as the source of prosperity.
It is not.
A government can redistribute wealth, but it cannot redistribute wealth that has never been created.
Economic growth therefore matters enormously.
If businesses invest, workers become more productive, wages increase and new companies are created, the tax base can expand without necessarily requiring dramatic increases in tax rates.
But if the economy stagnates, governments face an unpleasant choice.
They can raise taxes.
They can cut spending.
They can borrow more.
Or they can attempt reforms designed to increase economic growth.
The last option is usually the most attractive politically because it promises to make the pie bigger rather than simply dividing the existing pie differently.
The difficulty is that growth takes time.
It cannot be summoned by a speech.
The Cost of Government
Britain’s public sector is vast, and millions of people depend directly or indirectly on government spending.
That creates an important political reality.
Reducing expenditure is not simply a matter of identifying a few unnecessary programmes.
Behind every spending line are workers, patients, pensioners, families and communities.
That is why governments of both the left and right routinely discover that cutting spending is much harder than opposition politicians suggest.
But the opposite is also true.
Increasing spending is easier to announce than to finance.
A politician can promise additional funding for a hospital.
The difficult question is where the money comes from.
A government can announce billions for infrastructure.
The difficult question is whether the investment will produce sufficient economic returns.
It can increase welfare payments.
The difficult question is whether the policy encourages employment and supports vulnerable people without creating unsustainable long-term costs.
These are not ideological questions.
They are questions of arithmetic.
Burnham’s Challenge
If Burnham wants to defend a high-spending model of government, he has every right to do so.
But he must also answer three questions.
First: How much will it cost?
Second: Who will pay?
Third: What measurable benefit will taxpayers receive?
The third question is perhaps the most important.
Taxpayers are not necessarily opposed to paying taxes.
They expect something in return.
They want reliable public services.
They want functioning transport.
They want safe streets.
They want access to healthcare.
They want infrastructure that works.
They want government departments that deliver.
If higher taxes produce noticeably better outcomes, governments can make a powerful political argument.
If taxes rise while services deteriorate, however, public patience can quickly disappear.
The Conservative Counterargument
This is where Conservatives have traditionally sought to challenge Labour.
Their argument is that government should be more disciplined, that the private sector creates much of the wealth ultimately taxed by the state and that excessive taxation can weaken incentives to work, invest and start businesses.
That argument has its own weaknesses.
A government that cuts too deeply can damage the infrastructure and public services on which the economy depends.
Underinvestment can become just as expensive as overspending.
The debate therefore should not be reduced to “tax more” versus “tax less”.
The real question is what level and structure of taxation produces the strongest combination of economic growth, public services and fiscal sustainability.
That is a much harder question.
It is also the question voters should demand politicians answer.
The Myth of Unlimited Government Money
Political debate frequently creates the impression that governments possess a giant pot of money from which they can finance every desirable programme.
They do not.
Government revenue ultimately depends heavily on economic activity.
When companies make profits, employees earn wages and people buy goods and services, the government collects various forms of tax.
If economic activity weakens, tax revenues can suffer.
This creates a delicate relationship between taxation and growth.
Raise taxes too little and governments may struggle to fund essential services.
Raise them too aggressively and the economic base can potentially be weakened.
The answer is not necessarily a particular ideological percentage.
It is finding a sustainable balance.
Britain Needs Better Spending, Not Simply More Spending
There is another uncomfortable possibility for politicians like Burnham.
Perhaps the debate should not begin with the question of whether government should spend more.
Perhaps it should begin with whether government is spending effectively.
A badly designed programme can waste billions.
A well-designed programme can produce enormous social and economic returns.
The same amount of money can produce radically different outcomes depending on how it is administered.
That means public-sector reform is essential.
If Burnham wants to argue for additional spending, he should also be prepared to identify areas where government can become more efficient.
That could involve reducing administrative duplication, improving procurement, modernising technology, reforming inefficient systems and measuring outcomes more rigorously.
More money is not automatically the same thing as better government.
The Political Trap
There is a temptation for politicians to present every spending increase as compassion and every spending reduction as cruelty.
That is too simplistic.
Sometimes spending more is necessary.
Sometimes spending less is necessary.
Sometimes the correct answer is to redesign a programme completely.
The same applies to taxation.
A tax increase may be justified if it funds a valuable public service and does not impose disproportionate economic costs.
A tax reduction may be justified if it stimulates investment or corrects a damaging distortion.
The challenge for any serious government is to make those distinctions.
That is why Burnham’s political philosophy should be judged by results rather than labels.
Calling someone a socialist does not automatically prove that their economic policies are wrong.
Likewise, calling someone a fiscal conservative does not automatically prove that their policies are responsible.
The numbers ultimately matter more than the slogans.
What Is Left to Tax?
The provocative question in the headline — “what is left to tax?” — captures a genuine public frustration.
Many households already feel that taxation is a significant part of their financial lives.
Income tax, National Insurance, VAT, council tax, duties and other charges can make the overall burden feel considerably larger than any single headline tax rate suggests.
Businesses face their own collection of taxes and regulatory costs.
The danger for politicians is assuming that taxpayers will always accept another increase simply because the government has identified another spending commitment.
They may not.
At some point, governments have to demonstrate that they understand the limits of the tax base.
And that means focusing on productivity and growth.
A Different Kind of Socialism?
If Burnham wants to make a modern case for social democracy, he has an opportunity to do something more ambitious than simply promise higher spending.
He could argue that government investment creates the conditions for private-sector growth.
Better transport can reduce business costs.
Better education can increase productivity.
Better healthcare can keep people economically active.
Affordable housing can improve labour mobility.
Modern infrastructure can attract investment.
That is a more sophisticated argument than simply saying government should spend more.
It suggests that public spending can be an investment rather than merely a cost.
But investments must produce returns.
That principle should apply to government just as it does to the private sector.
The Final Question
Andy Burnham does not need to apologise for believing in an active state.
Nor should Conservatives pretend that every government spending programme is wasteful.
Britain needs public services, infrastructure and national institutions capable of dealing with enormous challenges.
But Britain also needs an economy capable of paying for them.
That is the central tension at the heart of the tax-and-spend debate.
The country cannot tax its way out of every structural problem.
It cannot borrow its way out indefinitely.
And it cannot spend its way to prosperity without creating the economic growth necessary to sustain that spending.
Burnham’s political challenge is therefore bigger than defending socialism.
He needs to demonstrate that his preferred role for government is financially sustainable.
If he can show that higher public investment produces stronger growth, better services and improved living standards, his critics will have a difficult argument to make.
But if the answer to every problem is simply another spending commitment followed by another tax increase, voters may eventually ask the obvious question:
How much more can the country afford — and what happens when there really is nothing left to tax or spend?
That is the argument Burnham must win.
Not with ideology.
Not with slogans.
But with the numbers.