Labour plotters issue bombshell plans to scrap stamp duty and reveal what will replace it

Key Labour MPs expected to shape any future leadership contest are demanding a wholesale rethink of the party's economic platform - with wealth taxes, stamp duty abolition and a diminished Treasury all on the table.

Two influential parliamentary groups have published what amount to rival economic blueprints for a post-Starmer Labour Party, with both sets of proposals expected to be studied closely by those positioning themselves for a leadership race.

Tribune, the soft-left parliamentary grouping, has put forward the more radical of the two visions - calling for the Treasury to be stripped of its growth remit and stamp duty to be abolished in favour of a national land and property levy. Its leader, former transport secretary Louise Haigh, was the first senior Labour figure to publicly push for Starmer to name a leaving date. Tribune is seen as an outrider for Andy Burnham, the Mayor of Greater Manchester, who is known to want to challenge Starmer for the leadership.

The centrist Labour Growth Group has taken a different tack, focusing on closing what it calls wealth tax loopholes and redirecting the revenue into a cut of up to 2p in employee national insurance. Its chair, Chris Curtis, added his voice on Monday to those demanding Starmer's resignation. Both groups count roughly 100 MPs among their membership, with significant crossover.

What is Louise Haigh proposing for the economy?

Haigh's paper, due for release on Tuesday, takes direct aim at the Treasury and the Office for Budget Responsibility, arguing that both institutions have locked Britain into a short-termist cycle driven by five-year forecasts and restrictive "headroom" targets that have strangled investment.

The result, she argued, was a system trapped between market credibility and democratic accountability - one that had consistently sacrificed long-term investment on the altar of short-term fiscal caution. She said fiscal bodies had been caught between "having to prove our credibility to the financial markets who lend us money and delivering change to the electorate that put their trust in us in 2024."

What is the Tribune faction's economic plan?

According to a Times report, the heart of her plan is a shift to a ten-year debt target, moving beyond the current three and five-year rolling approach to give the government room to invest in projects that pay dividends over the long term: "the confidence to seek funds from the markets to deliver on projects that will bear fruit beyond a given parliament."

Haigh is reportedly careful to stop short of calling for the current rules to be torn up - she argues they should be honoured first - but once the budget is in balance, she is understood to want the framework rebuilt around longer horizons and stripped of its dependence on the "headroom" metric.

Haigh reserved particular criticism for a tax system she described as structurally biased against workers - one that goes easy on wealth and assets while bearing down on earned income. She called for taxes on work to fall and advocated "a simpler system, with fewer reliefs, clearer rates and more consistent treatment across different forms of income and assets."

Her property proposals are sweeping - stamp duty would go entirely, replaced by a national land and property levy, while council tax would be cut sharply and redirected towards purely local services. That shift would require social care to be taken into national ownership and funded centrally. She also backed targeted cuts to business rates and reforms to VAT thresholds.

'Britain is no longer working'

Haigh told The Times: "Britain's economic model is no longer working for our country or its people. Growth has been too weak, too uneven, and too often driven by asset inflation rather than productive investment. We cannot fix that with incremental change; we need to rethink how our economic institutions work and what they are designed to deliver.

"That means reforming the institutional framework so it supports long-term investment rather than short-term constraint, and reshaping institutions like the Treasury that are currently not set up to drive growth. It also means being honest about today's constraints, including higher borrowing costs, and focusing much more seriously on how we crowd in investment across the economy."

What is the Labour Growth Group proposing?

The Growth Group's document, launching on the same day, focuses on capital gains reform — plugging what it calls "death and exit loopholes" and channelling the savings into a national insurance cut for employees of up to 2p.

A minister backing the report said: "I've just spent six weeks on the doorstep speaking to people whose families have voted Labour for generations and now don't know what we stand for. We've lost scores of good Labour local representatives who worked their hearts out for their communities, and frankly we owe them an honest reckoning with why.

"Voters are telling us that working hard and doing the right thing doesn't pay any more. If we don't find an answer to that now, we are finished."