Millions of families could face soaring bills as Andy Burnham vows to overhaul the council tax system.
The Greater Manchester mayor condemned the ‘regressive’ charge as he formally launched his by-election campaign.
Painting Makerfield as an effective Labour leadership contest, he said it was ‘not justifiable’ that levies were kept down based on old valuations.
He also demanded an annual ‘land value tax’ to catch those holding assets.
The stance raises the prospect of Labour targeting huge numbers of homes, largely in London and the South East, that have seen their values rise sharply.
Critics have warned such a move would hit families who have stretched themselves to buy a property and pensioners on fixed incomes.
Mr Burnham did not expand on what would take the place of council tax, with much of his ‘Manchesterism’ platform still remaining stubbornly vague.
However, previous proposals have included a percentage levy based on the value of a property.
Facing the first concerted effort to bottom out his plans for Government today, Mr Burnham:
- Shifted from his previous call for trans women to be able to use women’s toilets, saying new Government guidance should be implemented, albeit ‘in the fairest and most compassionate way possible’;
- Committed to standing by Labour’s 2024 manifesto – which ruled out rises in income tax, National Insurance and VAT – despite saying in the past that he wanted to increase the top rate of tax;
- Said he would keep Rachel Reeves’ fiscal rules, and played down his comments last year dismissing the bond markets – which spooked investors;
- Restated his support for scrapping inheritance tax in favour of a social care levy;
- Altered his position again on Home Secretary Shabana Mahmood’s immigration crackdown, echoing Left-wing calls for a rethink on ‘retrospective’ rules;
- Insisted electoral reform should be in Labour’s next manifesto but declined to say what system he would favour.
Millions of families could face soaring bills as Andy Burnham vows to overhaul the council tax system
Polls have consistently shown that Reform is poised to take the Makerfield seat, which is up for grabs on June 18.
However, Mr Burnham is hoping that his local ‘star power’ can overcome the wider trend, after one of his allies dramatically quit to hand him a route back to the Commons.
Answering questions from the media after his launch this morning, Mr Burnham ruled out breaking Labour’s manifesto before the next election if he takes over from Keir Starmer.
That appears to remove the possibility of rises in income tax, NI and VAT rates.
But he insisted that there was still room for ‘radical’ policies, suggesting he would look at calls from rival Wes Streeting and others on the Left for more ‘wealth taxes’.
‘I’ve long been persuaded of the argument for land value, land value tax. I’m personally keen to see reform of council tax,’ Mr Burnham said.
‘It’s a highly regressive tax, and I think it’s not justifiable based on those 1991 valuations, so… I see a big case for land and property and business taxation to be changed.’
Mr Burnham has already made clear he wants to see a rebalancing of wealth from the South to the North.
Political parties of all stripes have avoided revaluing properties since 1991 for fear of the repercussions for residents.
Rachel Reeves previously shied away from undertaking significant reform of council tax, despite admitting she had looked at a proportional property charge.
In 2024 the Tony Blair Institute proposed a levy worth 0.5 per cent of the value of each property, to replace council tax.
The think-tank suggested a minimum payment of £1,350 for properties worth less than £270,000, and a maximum of £6,250 over £1.25million.
The report estimated that 4.1million people in larger homes would end up paying significantly more, although 12million would have lower bills.
The change was praised as potentially boosting growth by giving an ‘incentive for older homeowners in high-value properties to downsize’.
A separate blueprint from the Onward think tank suggested proportional annual payments up to a property value of £500,000.
The report estimated that would need to be 0.44 per cent to replace council tax revenues, with a minimum annual payment of £800.
There would be a 0.54 per cent annual charge on the portion of the property value between £500,000 and £1million, and 0.81 per cent above that.
Onward said that those thresholds would be cost neutral for the Government, although exempting those who had already paid stamp duty on their homes would create an initial shortfall.
The Government has already pledged a ‘mansion tax’ on homes worth more than £2million. Another option for reforming council tax would be introducing more bands.
Mr Burnham also restated his support for scrapping inheritance tax in favour of a social care levy.
‘I’m not going to resile from it. I’ve long believed we should have a different way for paying for care,’ he said.
Mr Burnham has talked about overhauling land taxation for more than a decade.
During his failed 2010 Labour leadership bid he called for a land value tax, which he said was ‘an idea so old Labour it can be traced back to Thomas Paine’.
In his launch speech, Mr Burnham painted Makerfield as an opportunity to get rid of Keir Starmer (pictured)
He wrote in the Guardian that year: ‘The LVT, an annual tax on the market rental value of land, would allow for the abolition of stamp duty — a tax on the aspiration of young people to put down roots and get on with life.’
Bathed in sunshine and flanked by activists waving placards in Makerfield today, Mr Burnham teed up the by-election as an opportunity to ‘change’ Labour.
‘I know my own party needs to change. We need to be better than we have been,’ he said.
‘A vote for me in this by-election is a vote to change Labour.’
The barb drew an immediate backlash from Starmer loyalists, with minister Mike Tapp responding on X: ‘We need stability to deliver more – faster – not change. Country first.’
The former minister under Tony Blair and Gordon Brown has been pitching to Labour’s Left.
Chief whip Jonathan Reynolds was the only Cabinet minister at the launch this morning.
MPs Kim Johnson, Barry Gardiner, Ian Byrne and Rebecca Long-Bailey were there, along with Liverpool metro mayor Steve Rotheram.
But he has already backed off his pledge to rejoin the EU – a view popular among MPs but regarded as deeply unhelpful in an area that heavily endorsed Brexit.
Mr Burnham was believed to have told Home Secretary Shabana Mahmood he supports her tough immigration crackdown.
However, he has now wavered on the retrospective element of indefinite leave to remain – regarded as crucial for addressing the wave of arrivals from recent years. ‘I know there have been concerns raised by Members of Parliament on that issue,’ he said.
‘So, I have indicated broad support for what the Home Secretary is trying to do, but I do think on that issue care needs to be taken.’
Critics have accused him of watering down his commitment to a proportional representation – PR – voting system.
Instead Mr Burnham has suggested he would like MPs to be elected using the supplementary vote method, and kicked the issue down the road by admitting it would need to be in a manifesto first.
Other policies floated by the mayor in the past include increasing the top rate of tax to 50p, while he has praised Gordon Brown’s disastrous 10p tax rate.
But that was effectively ruled out during this Parliament by his comments today.
‘I am committed to the manifesto commitments on tax. I think that’s really important from the trust, from the trust point of view,’ Mr Burnham said.
He has also suggested that ‘wealth’ would be shifted from the South to the North of England.
Pressed on whether he would want to bring in radical policies, Mr Burnham suggested his focus is on working within the existing framework.
‘I think we’ve obviously got to look at the manifesto that Labor presented in 2024. I think there’s space to be more radical within that manifesto,’ he said.
Chief whip Jonathan Reynolds was the only Cabinet minister at the launch this morning
Mr Burnham’s ‘change’ demand drew an immediate backlash from loyalists, with minister Mike Tapp responding on X: ‘We need stability to deliver more – faster – not change. Country first.’
Mr Burnham’s stance on gender issues has been under the microscope after the Daily Mail revealed footage of him dismissing a ‘minority’ who have concerns.
He tried to gloss over the questions today, suggesting it had been resolved by new Government guidance.
‘I just think we’ve got to, we’ve got to move into the next phase now, not constantly rerunning arguments.
‘I think Britain has done this too much in recent times, over Brexit and other things.
‘We’ve got to stop arguing with each other, I’ve got to start like finding some common ground and stop pulling together a country, pulling together.’
