Burnham Signals Higher Property Taxes for the South as He Eyes Council Tax Overhaul
Andy Burnham has used his first big broadcast interview since entering Downing Street to float the idea that homeowners in southern England should face steeper property taxes, as part of a wider shake-up of the council tax system.
Speaking to the BBC’s Laura Kuenssberg, the Prime Minister argued that the current regime needs to “create some fairness” for the North, pointing to what he sees as an unjust gap between bills in Greater Manchester and London.
The options on the table
Downing Street is understood to be weighing several possible replacements for council tax, including:
A land value tax, charging owners based on the value of their land rather than the building on it
A flat annual levy set at a fixed percentage of a property’s value
A lower threshold for the “mansion tax” that already applies to the most expensive homes
Council tax bands are still calculated using property values from 1991, a system critics say has entrenched regional unfairness as house prices have diverged sharply since then.
The scale of that divergence is stark. Hartlepool residents pay an average Band D bill of £2,556 — more than double the £1,047 charged in Westminster — despite the average Hartlepool home being worth roughly £131,000, against £836,000 in Westminster, according to ONS figures. Relative to house prices, that means people in Hartlepool are paying around 13.5 times more than their Westminster counterparts.
A land value tax would tend to push bills up in high-value areas like London while easing them elsewhere, since it taxes underlying land value regardless of what has been built on it, an idea Burnham has backed before and which is said to have the backing of more than 100 Labour MPs. A proportional property tax, meanwhile, would scrap both council tax and stamp duty in favour of a flat 0.48 per cent annual charge on a home’s value, which would actually mean a higher bill for an average Westminster property, taking it from £1,047 to roughly £2,247.
By contrast, simply lowering the mansion tax threshold (currently £2 million) with Burnham not ruling out a cut to £1.5 million, would raise more revenue from expensive homes but wouldn’t do anything to bring bills down in the North.
“Right and fair”
Asked whether wealthier Britons should expect to pay more tax under his premiership, Burnham pointed to the previous chancellor’s efforts on this front:
“There are people here in Greater Manchester who pay a much higher council tax than people living in much larger homes in London.”
He credited Rachel Reeves with beginning to tackle the imbalance, saying she “was right to start to reform council tax to create some fairness there in relation to people in homes that are of much greater value, who haven’t seen their council tax go up over the years because of the failure to revalue the banding,” adding: “That’s an example of something that I think was right and fair.”
Pressed on where the burden might fall in the months ahead, he had a blunt message for what he called “vested interests”: “You can’t have it like this anymore.”
On the specifics of council tax reform, Burnham was more guarded, stressing the need to stick to Labour’s 2024 election manifesto and to “be very prudent when it comes to the public finances.” He added: “I will stick to the fiscal rules… I will take that cautious approach.” Notably, while that manifesto ruled out raising income tax, VAT and National Insurance, it was silent on council tax, leaving him room to act.
Burnham has form on this issue. At the launch of his Makerfield by-election campaign in May, he said that “land is under-taxed,” citing swathes of unused land across Greater Manchester that attract no charge. He has also repeatedly branded the existing council tax system “highly regressive,” though he has yet to formally back one specific replacement.
The plans have drawn fire from the Conservatives. James Cleverly, the shadow housing secretary, accused Burnham and Labour of “looking for more ways to tax Middle England, and raise taxes on people’s homes,” arguing that swapping council tax and stamp duty for a new house-price levy “would not be a tax cut for hard-working families – quite the reverse.”
Reports that Burnham is strongly considering replacing both council tax and stamp duty with a flat 0.48 per cent annual charge on a home’s current value drew a sharper response from Cleverly. Writing in reaction to the story, he said:
“Floating an idea like this is good for generating headlines. But Anyone who is just about to buy a house (and pay stamp duty) now has a massive incentive not to do so. Further depressing a sluggish housing market. Well done Burnham!”
Treasury officials are reportedly split between the land value tax and the proportional property tax models, according to a report by The I Paper, though government sources later pushed back on that account when briefing Politico’s Playbook.
Beyond council tax
The interview ranged well beyond property taxation:
No early election. Despite pressure from Nigel Farage and Reform UK, Burnham firmly ruled out going to the country before 2029: “I’m going to rule it out, yeah. There’s no early general election, I don’t think people want it.” He argued his mandate rests on Labour’s original manifesto rather than requiring a fresh vote of his own — a case he framed as being about a “parliamentary democracy.” A YouGov poll last month found 48 per cent of Britons thought Starmer’s successor should call an election, against 35 per cent who disagreed.
Welfare crackdown. Burnham confirmed he is looking at toughening rules on sickness benefits, including plans reported by The Telegraph to strip young claimants of support unless they take up training or voluntary work. “We’ve got to get really serious as a country at getting the welfare down,” he said, while stressing the aim was to change “the nature of the support” rather than simply blame claimants.
Defence spending. He declined to commit to hitting 3 per cent of GDP on defence by 2030, instead pointing to the need to fully fund the defence investment plan ahead of this year’s Budget — a notably softer line than that of his new Chancellor, John Healey, who quit as defence secretary partly over this same issue under Starmer.
Social care. Burnham warned the NHS risks “collapse” without fixing social care, pledging to spend “whatever political capital I have” on reform, while hinting tax rises may be needed and calling for a “conversation with the public” about funding care for an ageing population. The Health Foundation estimates an NHS-style social care system would cost an extra £18.7bn a year by 2035.
Trump. Asked whether he trusts the US president following their first phone call, Burnham was noncommittal: “I always will seek to judge people as I find them… I found him to be really warm on Monday. But obviously we will continue to build the relationship as we go forward.”
Comments (0)