Andy Burnham has sparked fresh speculation that he could introduce a new property tax that would hit London hard, after the Prime Minister described former Chancellor Rachel Reeves' council tax reforms as a 'start'.
Burnham's remarks on council tax
Speaking to the BBC's Panorama program 'Andy Burnham: the Laura Kuenssberg Interview', Burnham noted disparities in council tax between regions. "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. He added that 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."
Proportional property tax proposal
Burnham has previously backed a proportional property tax (PPT) advocated by the Fairer Share campaign, which would replace council tax and stamp duty. The tax would be charged at 0.48% of a property's value, rising to 0.96% for empty homes, second homes and those owned by foreign nationals. London would be the only area in the country that would end up paying more under the new system, with an estimated additional £7.5 billion bill for the capital. London experts argue the property tax system needs reforming but warn the proposal would unfairly penalise the capital, adding £800 to the tax bill on homes worth £600,000.
However, Downing Street denied the PPT was "actively considered" by the new government. A No10 source said: "Suggestions that scrapping council tax or stamp duty is under active consideration by this Prime Minister are not true."
Property prices falling in London
The row comes as property prices in many London boroughs are falling, with nearly £250,000 wiped off the average value of homes in Westminster in a year. Burnham has vowed to stick to Labour's election manifesto pledge not to raise the rate of income tax, VAT or National Insurance for employees, but has signalled he may increase taxes on the better off, possibly by raising the £12,570 threshold for starting paying income tax.
Funding concerns
Burnham has unveiled ambitious plans to deliver the "biggest devolution of power in modern times", roll back 40 years of "neo-liberalism", and embark on the largest council homes building programme in the post-war period. He is expected to channel billions more in public spending to boost England's regions, but is yet to specify how he will fund his landmark reforms. While he has announced early measures to reduce the cost of living, such as cutting VAT from electricity bills, funding for some has not been nailed down.
