Economic heavyweights reported to be advising Andy Burnham have opted not to join his government because of disagreements over possible wealth taxes, according to reports.

Lord Jim O’Neill, the former Goldman Sachs executive, is in ongoing talks with Burnham over a potential role, City AM reported last week.

Fresh reports have suggested that O’Neill has not joined Burnham because of his dislike of a possible wealth tax and the prime minister’s refusal to rule out the policy.

He is also said to want to retain oversight of his business interests and shareholdings in financial groups.

Before the Makerfield by-election, it was widely reported that O’Neill, former Bank of England chief economist Andy Haldane and former Office for Budget Responsibility chair Richard Hughes were advising the Prime Minister.

City AM revealed last week that none of them had taken roles in government a month into the new premiership, even after an Autumn Budget date had already been announced.

That has left Burnham without the economic expertise his allies had hailed before he became an MP, at a time when the government is preparing for its first major fiscal set-piece and facing a debate over how to balance revenue-raising with growth. Reports of the three advisers’ proximity to Burnham had been credited with calming investors’ nerves ahead of his premiership.

It has also been reported that Burnham has kept Rachel Reeves’ adviser Neil Amin-Smith to help him with economic policy.

Burnham’s problems ahead

Throughout Sir Keir Starmer’s government, several Labour backbenchers urged the Prime Minister to raise taxes on the rich and wealthy.

Many MPs, who have since pledged their allegiance to Burnham, called for a 2 per cent tax on assets above £10m, arguing it would raise “tens of billions” of pounds.

Signatories to a letter included Barry Gardiner and rumoured London mayor hopeful Dawn Butler, both of whom publicly backed Burnham to become Prime Minister.

More moderate Labour figures, including members of the Labour Growth Group caucus who backed Wes Streeting to launch a leadership bid, advocated for a “wealth tax that works”.

That approach would involve equalising capital gains taxes with income taxes while allowing some allowances designed to incentivize investment.

In an interview with City AM, Haldane said such a tax rise should not be used as a “cash cow”.

Tax debates ahead of the Budget, along with the absence of a clear economic advisory team, have exposed underlying divisions within the party and added pressure on Burnham to assemble a credible policy operation quickly.

One Labour strategist said they were surprised Burnham had not appointed any economic advisers, while another suggested Louise Haigh was running policy “with ChatGPT”.