Greater Manchester Mayor Andy Burnham could scrap council tax in favour of a new land or property tax, as pressure mounts on the Labour government to reform the system. A band D council tax bill in Wandsworth this year is £1,028, while a home in the same band in Leicestershire must pay £2,528.75 – just short of the highest band D of £2,625.43 in Dorset.
Regional disparities in council tax bills
The fresh analysis comes as Mr Burnham looks for ways to pay for an overhaul of the social care system and higher defence spending. Council tax, which is levied by local authorities on those who own or rent their homes to pay for services, has been criticised by Burnham in recent days for creating regional disparities.
“There are people here in Greater Manchester who pay a much higher council tax than people living in much larger homes in London,” he told the BBC.
Labour backbench pressure for reform
Labour has come under pressure from its backbenches to reform council tax, including from chairman of the cross-party group of MPs on council tax reform, Jonathan Brash. The Labour MP for Hartlepool told the i Paper that “wholesale reform” was needed. Brash has previously pointed to band A homes in Hartlepool paying nearly 2.5 times more than in Westminster.
He said: “Council tax is one of the most unfair taxes in Britain, and nowhere is that injustice clearer than in towns like Hartlepool.”
Conservative criticism of potential change
The Conservatives criticised any potential change as Labour “looking for more ways to tax middle England”. Shadow housing secretary James Cleverly said: “Andy Burnham and Labour are just looking for more ways to tax middle England, and raise taxes on people's homes.”
“Replacing council tax and stamp duty with a new house price tax would not be a tax cut for hardworking families – quite the reverse: people across England would end up paying more. This is just smoke and mirrors from the party that has already hiked both council tax and stamp duty. The Conservatives are the only party that will keep tax on the family home down – including by scrapping stamp duty entirely for primary residences.”
The debate over council tax reform is set to continue as Burnham explores options for funding social care and defence, with a single flat-rate tax based on land or property valuations that would favour poorer areas under consideration.
