Andy Burnham is facing mounting pressure to overhaul council tax in his upcoming Autumn Budget, with a campaign group urging him to replace both council tax and stamp duty with a single proportional property tax. The proposed change has the backing of 47 per cent of the public, compared to just 13 per cent opposed, according to a new poll.
The Labour government leader and his Chancellor, John Healey, will deliver their Autumn Budget on October 28. Mr Burnham has pledged to keep the cost of living at the top of his agenda, and council tax reform is seen as a key priority among some MPs.
Fairer Share campaign proposes £1,200 cap
The Fairer Share campaign has proposed scrapping council tax and stamp duty in favour of a proportional property tax, with any annual increase capped at £1,200. The campaign argues the current system is outdated and unfairly penalises those with less valuable homes.
Afzal Khan, the Labour MP for Manchester Rusholme and a close ally of the Prime Minister, voiced strong support for the plan. He said: “Replacing council tax with a progressive property tax like the one proposed by Fairer Share would make a huge difference to the amount of money the vast majority of my constituents would have in their pockets.”
“In my constituency, over 90 per cent of households would save an average of £500 every year, with only the broadest shoulders expected to pay that bit more,” Khan added. “It is exactly what a government focused on the cost of living should consider.”
MPs and experts back reform
Jonathan Brash, the Labour MP for Hartlepool, also backed the campaign, describing council tax as “one of the most regressive taxes in Britain.” He said: “It hits hardest constituencies like mine, where people pay more despite often having less.”
Paul Johnson, former director of the Institute for Fiscal Studies and now provost of Oxford University’s Queen’s College, told The i Paper that the current system is a “mess.” He argued for a tax based on a fixed proportion of an up-to-date property value.
“Council tax is the only tax we have which is deliberately regressive. So the less valuable your house, the higher the fraction of that value you pay in tax,” Johnson said. “In any rational world, you move in that direction. That would make a lot of people a little bit better off, and a small number of people an awful lot worse off. And that’s always particularly challenging.”
Treasury response
A Treasury spokesman responded to the proposals, saying: “The Chancellor is fully focused on his priorities, which will boost business, help with the cost of living and support people in every postcode.”
“As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals,” the spokesman added. The Autumn Budget on October 28 will be the moment when any concrete changes to the tax system are revealed.
