Prime Minister Andy Burnham is facing calls to introduce a land value tax for households in England, with proposals suggesting a levy of 1.28% of property value to replace council tax and residential stamp duty. According to experts, such a change would result in about two-thirds of households paying less, while a third would pay more.
Pressure mounts for council tax reform
Burnham, who also serves as the MP for Makerfield, is being urged to target council tax changes as he seeks to fund his social care system and a higher defence bill. The Labour leader previously acknowledged the need to stick to the manifesto on which the party was elected in 2024, but said he understood how people felt the current system was disproportionate.
Speaking to Laura Kuenssberg on the BBC's Panorama programme, Burnham said: "There are people here in Greater Manchester who pay a much higher council tax than people living in much larger homes in London."
Burnham's stance on fairness
He added: "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. So that's an example of something that I think was right and fair."
Burnham continued: "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? So there are big decisions ahead, you are right about that." He has previously said he has been "persuaded" of the argument for reforming the system.
Expert analysis of land value tax
Dan Neidle, from the Tax Policy Associates, discussed the potential impact of a land value tax, stating: "The principled case for LVT is easy. The practical case for LVT seems equally straightforward if we look at the headline result that (on our model) at least 63% of people will benefit in immediate cash terms."
The proposal comes as Burnham faces significant fiscal challenges, including funding social care and increasing defence spending. The land value tax would replace two existing levies, potentially simplifying the tax system while aiming to address perceived inequalities in the current council tax structure, which has not been revalued in England for decades.
