Burnham’s £18billion ‘death tax’ nightmare: Fears PM will try to impose 10% levy on ALL inheritances to fund social care
Andy Burnham has refused to rule out backing a 10% "death tax" on all inheritances to help fund social care in England, fuelling speculation that the Prime Minister could look to inheritance reform to plug an £18billion funding gap. The suggestion has alarmed critics, who fear a flat levy applied across all estates would hit ordinary families far more broadly than the current inheritance tax system, which only applies above certain thresholds.
The report notes this comes alongside other signs of Burnham diverging from New Labour orthodoxy, including dropping the drive to send half of school leavers to university, and warning of "unfairness" that could see council tax rise for homeowners in the South. Opposition figures, including Kemi Badenoch, have seized on Burnham's rising profile to challenge Labour more broadly, including over its early-release prisoner scheme. No formal government proposal has been confirmed; the story centres on unresolved fears and political reaction rather than an announced policy.
- Burnham won't rule out a 10% inheritance levy to fund social care.
- Critics fear it could raise £18billion but hit all estates broadly.
- Comes amid wider Burnham breaks from traditional Labour policy positions.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters argue that social care funding is in crisis and needs a stable, broad-based revenue source rather than relying on cash-strapped local councils or catastrophic costs falling on unlucky individual families. They see a modest levy on all inheritances as a fairer alternative to the current system, where some people lose almost everything to care costs while others pass on wealth entirely untouched, and argue that spreading the burden across society reflects a shared responsibility for looking after the elderly and infirm. Seeking cross-party agreement, they contend, is a responsible way to build a durable settlement that survives changes of government, rather than repeating decades of short-term fixes.
The case against
Opponents argue that a flat levy on all inheritances, rather than only larger estates, amounts to taxing modest, already-taxed family savings and the family home, hitting ordinary households who have worked hard to leave something for their children. They see this as a form of double taxation, since the money was typically earned and taxed as income, savings or through existing property taxes during the person's lifetime, and worry it penalises thrift and family responsibility while doing little to address inefficiencies in how care is currently delivered. Many would prefer funding solutions drawn from general taxation, targeted contributions from wealthier estates, or private insurance-style models, arguing these preserve the principle that people should be able to pass on the fruits of their labour to their children without an additional levy triggered simply by death.