Andy Burnham has hinted that overhauling council tax could become one of the defining decisions of his premiership, pointing out that people in Greater Manchester can end up paying more than owners of far more valuable homes in London.
The core problem, he says, is that council tax bands in England are still pegged to property values from 1991. Speaking to Laura Kuenssberg for BBC Panorama, in the same interview where he set out his approach to Trump and ruled out an early election, Burnham praised the previous government’s move to add an extra charge on homes worth over £2m, calling it a genuine step towards fairness.
“There are people here in Greater Manchester who pay a much higher council tax than people living in much larger homes in London,” he said. “So the chancellor before, Rachel Reeves, 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. That’s an example of something that I think was right and fair.”
Why the whole system is such a mess
Council tax was introduced in 1993, but its bands still run off estimates of what properties would have been worth back in April 1991. More than three decades of house price movement has simply never been fed into the system.
That means a house that’s shot up in value can sit in the same band year after year, while households in parts of northern England and the Midlands can end up paying comparable or even higher bills despite their homes being worth substantially less. What you pay also depends on your local council’s own spending needs and tax base, and councils dealing with real deprivation and fewer expensive properties often have to charge higher rates just to keep basic services running. Wealthier areas stacked with expensive homes can sometimes get away with lower headline rates entirely.
It’s regressive too, because council tax simply doesn’t scale with property value the way something like income tax does. Someone in a multimillion-pound house might pay more in raw cash terms than a family in an ordinary semi, but they’ll be paying a far smaller percentage of what their home is actually worth.
Burnham’s comments suggest the government’s now wondering whether simply bolting an extra charge onto expensive homes even goes far enough, a debate that echoes the wider wealth tax argument already playing out around Gabriel Zucman’s proposals and the millionaires’ letter to Burnham.
Two possible replacements reportedly on the table
The i newspaper reports two different models are currently competing for support inside government, though sources are playing down any suggestion a final decision’s actually been made.
The first is a proportional property tax, replacing both council tax and stamp duty with a single annual charge tied to a home’s current market value. One version backed by the Fairer Share campaign would set that rate at 0.48% a year. Under that model, a £250,000 property would attract a bill of around £1,200 annually, a £500,000 home £2,400, and a £1m property roughly £4,800. Second homes, empty properties, and homes owned overseas would face a higher rate under the proposal.
Supporters say this would actually lower bills for most households while asking owners of the priciest properties to pay considerably more. Fairer Share claims around three-quarters of households would come out ahead, though that obviously depends heavily on the final design and whatever transitional protections get built in. Scrapping stamp duty entirely could also make moving house genuinely cheaper by removing the big upfront tax bill that currently comes with most purchases.
The obvious downside is that some homeowners, especially in London and the South East, could face significantly bigger annual bills. There are also real, difficult questions still unanswered: how often would homes actually get revalued, and what protection would exist for someone sitting on a valuable property but living on a modest income.
And then there’s the land value tax option
The second model reportedly under discussion is a land value tax. Instead of taxing the combined value of a house and the ground it sits on, this would tax the underlying value of the land alone.
Supporters argue this would stop developers and investors sitting on valuable land without actually building on it, since you’d face a charge whether or not the land was being put to any productive use. It could also claw back some of the value created by public investment, if a new railway station or transport link boosts nearby land prices, part of that gain would come back to the public purse rather than sitting entirely with the landowner.
The catch is that separating the value of the land from whatever’s built on it is genuinely tricky in practice. You’d need a reliable national valuation system, and any disputed assessments could generate a serious wave of appeals.
Burnham himself has previously called council tax “highly regressive” and said he’s long found the arguments for taxing land more effectively pretty persuasive. Neither model is currently official government policy, and no timetable’s been set for any of this.
The manifesto problem
Any genuinely major change here creates an obvious political headache for Burnham. Labour’s 2024 manifesto made no specific commitment to reform council tax, and senior party figures went further than that during the campaign, explicitly ruling out any change to the existing bands. Jonathan Ashworth said at the time: “We’re not doing council tax re-banding,” and Jonathan Reynolds separately confirmed there’d be no changes to the bands under a Labour government.
Rachel Reeves later brought in the High Value Council Tax Surcharge on properties worth over £2m anyway, due to start in 2028, with additional annual charges beginning at £2,500 and rising to £7,500 for the most expensive homes. Because that surcharge sits on top of the existing bands rather than actually changing them, the government argued it hadn’t technically broken Labour’s promise.
Burnham accepted he’d face exactly the same scrutiny if he went further. “We need to honour the manifesto upon which Labour was elected, and if I was to bring forward any changes, obviously people would rightly say, well, is this consistent with that manifesto?” he said. “So there are big decisions ahead. You are right about that.”
His language stopped well short of actually promising reform. It also very deliberately left the door open, much like his careful answers on defence spending and an early election in that same Kuenssberg interview.
A reform every government has been too scared to touch
Governments have known council tax is broken for decades, and every single one has decided fixing it properly is too politically risky to attempt. Any revaluation creates winners and losers, and the people getting smaller bills rarely feel as strongly about it as the ones staring at a much bigger one. Decades of uneven house price growth mean the sharpest increases would land in some of Britain’s most politically sensitive areas.
Scrapping stamp duty could genuinely help people trying to buy or move, but existing homeowners with no plans to move any time soon might not be thrilled about swapping a one-off tax for a bigger recurring annual bill instead.
Government sources are downplaying any suggestion either model is close to being picked, and the Treasury would need to work through how much revenue each system could actually raise, how often properties would need revaluing, and how councils could be protected from sudden swings in their revenue.
What Burnham has made clear, though, is exactly what he thinks of the current system: unfair, badly out of date, and particularly punishing for places like Greater Manchester. Whether he’s actually willing to spend the political capital it would take to replace it is a genuinely separate question, and one his government still has to answer, right alongside the defence spending and taxation decisions already piling up on his desk.
One response to “Andy Burnham signals council tax reform as he warns system is deeply unfair”
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People need to ask themselves a simple question. Why do people in a town like Blackpool pay higher council tax than people in some of the wealthiest parts of the South-East?
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