Andy Burnham’s first Budget as Prime Minister arrives on 28 October. He has committed to respecting the pledges Sir Keir Starmer set out in Labour’s 2024 manifesto, and not to raise income tax, VAT or national insurance.

But the priorities he has set out – building council houses, reforming the welfare and education systems, changing social care – are unlikely to come cheap, and the national debt stands at nearly £3trn, or 94.9 per cent of GDP. Tax rises feel inevitable.

So, who should Burnham tax? Economist former Labour policy adviser give their perspectives.

Tax has two purposes. The first is to raise revenue – something the Government urgently needs as there is a deficit in government finances, and public services face increased demand after years of underfunding.

But the second purpose of taxation is deterrence. For years we hiked taxation on cigarettes which, alongside public health campaigns, has decreased tobacco usage and saved on health spending. We tax petrol use for much the same purpose – it encourages people to use less and walk, cycle or take public transport where possible, improving air quality and public health.

We need to change behaviour on housing too. To buy a second home when others cannot afford one is greedy. Invest your money in stocks and shares, antiques, fine art – anything you like, as long as it isn’t an essential good. Too few people can buy a home, and too many are paying too much for them.

Whether you pay rent or a mortgage, more and more of us are paying more and more simply to keep a roof over our heads. Private rent increases have been above inflation in recent years, and the benign 2 -3 per cent mortgage rates of the 2010s and early 2020s have given way to 5 per cent – adding hundreds of pounds a month to the cost of a mortgage. Despite a modest fall recently, house prices remain at historic highs relative to wages.

The housing crisis has been exacerbated by the failure of successive governments to build enough homes. Now the young are shut out. Under-25s made up a quarter of first-time buyers in the 1990s; now they account for just 6 per cent.

We need more homes to enter the market. Yet more and more people have bought property as investment opportunities rather than as homes. Data from 2022-23 suggests that around 4.3 million households own more than one property. This has to be discouraged. To that end, the Government should hike taxes on the purchase of second homes – either through stamp duty or through a punitive surcharge on mortgage rates at banks and building societies.

It wouldn’t ban second home ownership, but it would mean that if you do want to own a second (or third, fourth or one-hundredth) home, you are paying for the damage it does to others: it’s the “polluter pays” principle.

Other countries, including Singapore, Canada and Denmark have either banned or severely limited the ability of foreign individuals, trusts or companies from buying homes or residential land. We could do something similar here. The principle is simple – if you don’t live here, you don’t need a permanent home here.

But there is a strong economic case to deter second home ownership and landlordism. The economist John Maynard Keynes called for the “euthanasia of the rentier” – that is, an end to those who seek rent, extract value for themselves and produce exactly nothing of value.

That’s happening in today’s housing market, especially in the private rented sector. Rentier landlords do not create jobs or growth; they simply extract value and accumulate wealth for themselves. Worse, they do it by taking away a growing share of people’s post-tax incomes.

Higher rents and mortgage rates are depleting disposable incomes which could be spent in the job-creating parts of the economy. Paying more rent or a higher mortgage doesn’t create jobs, but spending in local shops, pubs and restaurants does.

Another means of deterring second home ownership and boosting the economy would be to freeze rents for a couple of years – a policy once backed by Andy Burnham when he was mayor – and then cap rent increases at the rate of inflation. It’d also counter any temptation to pass on any additional tax costs to tenants.

It would help the public finances too. We currently spend £37.3bn a year on housing benefits, and local councils are spending £3bn a year on emergency accommodation for the record number of homeless families in England. Ultimately the country needs to be building council housing in far greater quantities, which would help reduce the cost of housing benefit and give people secure permanent housing.

But as housebuilding is ramped up, freezing rents and taxing second homes would be the right move for a Labour government determined to tackle the housing crisis, kickstart growth and improve the public finances.