Burnham's Vision for London: Tax Rises and Property Tax Overhaul
Andy Burnham, set to become Prime Minister after Sir Keir Starmer's resignation, has signaled potential tax increases on wealthier households to benefit the less well-off. He has committed to not raising income tax, VAT, or employee National Insurance rates, as per Labour's 2024 manifesto. However, he has hinted that his government "might be having to ask for a little more" to fund regional investment. Burnham previously supported replacing council tax and stamp duty with a property levy, which could cost London an extra £7.5 billion. Alternative measures include lowering the mansion tax threshold from £2 million to £1.5 million, cutting the 45p top income tax rate threshold, increasing bank levies, or introducing a wealth tax. He also plans to overhaul business rates, raising taxes on out-of-town warehouses for online giants like Amazon to fund cuts for high street businesses.
House Prices: Potential 20% Fall Amid Devolution Plans
If Burnham introduces a new property or land value tax, some reports suggest house prices could drop by 20%. London prices have already been falling, alarming homeowners with large mortgages. Burnham argues his levelling-up agenda will benefit London by preventing "overheating," reducing migration from other regions, and easing housing cost pressures, transport overcrowding, and other strains. Many older Londoners worry about their children's ability to afford homes in the city.
Job Cuts: Whitehall Downsizing and Regional Devolution
Burnham's devolution plans could see tens of thousands of Whitehall jobs moved to the regions. Peckham MP Miatta Fahnbulleh, former head of the New Economics Foundation, suggested central government will become "far smaller" and more "strategic." London has one of the lowest proportions of public sector workers per population due to its large private sector. The impact on private sector jobs remains unclear, with some bosses nervous after Chancellor Rachel Reeves' £20 billion hike in employer National Insurance contributions.
Inequality: Focus on Left-Behind Communities
Burnham has vowed to govern for the whole UK, focusing on left-behind communities, guided by his "Makerfield test." London has the highest unemployment in the country at 6.6% (ONS), compared to 5% in the North West and 2.9% in Wigan. The capital also has huge wealth, leading to what has been called "grotesque" inequality. It is unclear how levelling-up London's deprived communities will fit into Burnham's plans.
Transport: Khan Warns Against Investment Cuts
London Mayor Sir Sadiq Khan, recently given a peerage, has urged Burnham not to cut investment in London as he boosts other regions. Khan stressed, "It's crucial that the new Labour leader invests in every part of the country. This includes London, which is central to delivering for the rest of the country." Capital bosses also urge Burnham to back airport expansion at Heathrow, Gatwick, and Luton, as well as Bakerloo Line and DLR extensions.
Housing Crisis: More Powers for Khan
As part of devolution, Khan is set to gain more power over housing and education, potentially enabling more radical action to build council and affordable homes. As mayor, Burnham championed renters' conditions in Manchester, signing an open letter calling for a freeze on private sector rents. Sir Keir's government had taken steps like the Renters' Rights Act and agreements to reduce affordable home requirements in some developments to unlock more schemes.
Thames Water: Nationalisation Pressure
Burnham is urged to nationalise Thames Water, which has hiked bills for millions, racked up huge debts, and paid big bonuses. Nationalisation could cost taxpayers several billion pounds. Alternatively, the government may put Thames Water into a Special Administration Regime to maintain supplies while seeking a new buyer.
Heathrow Third Runway: Environmental Concerns
Eight years ago, Burnham warned that expanding Heathrow could "suck more activity and investment into the capital and leave the North waiting even longer for its promised Northern Powerhouse." Former Transport Secretary Louise Haigh and Net Zero Secretary Ed Miliband, expected to play key roles, have stressed that a bigger Heathrow must meet climate and air pollution tests. Some unions support expansion.
