Political leaders in the North East have renewed calls for a fairer financial deal for the region, following reports that Prime Minister Andy Burnham could abolish council tax. Burnham has indicated there will be “big decisions” on the future of the tax, criticising its unfairness, but Downing Street has since denied he is actively considering scrapping it.
Council tax disparities criticised
Senior figures in the North East have long argued that the council tax system penalises people in deprived areas. Hartlepool Labour MP Jonathan Brash pointed out that band A homes in his constituency are charged nearly 2.5 times more than equivalent properties in Westminster.
Newcastle City Council leader Colin Ferguson, a Liberal Democrat, told the Local Democracy Reporting Service he would support a review of a system he called “deeply regressive”. He said: “I have said for a long time that we need a new way to fund local government and if this government is finally willing to grasp the nettle and look at the overall funding package for councils, that is a good thing.”
However, Ferguson cautioned that any reforms must not leave his council worse off, adding: “It has to be a net positive settlement for us. But if it works well for the council and takes the pressure off local families, then it is worth having the conversation.”
Reactions from across the political spectrum
Karen Clark, the Labour mayor of North Tyneside, said: “I would welcome any reforms that make the way local government is funded fairer, giving councils like North Tyneside the stable, long-term funding we need to protect frontline services, invest in our communities and continue delivering for local people.”
Most councils in the North East applied a 4.99% council tax rise this year, the maximum without a referendum. Reform UK-run County Durham applied only a 1.99% increase. Its deputy leader, Darren Grimes, told the LDRS: “Scrap council tax by all means. But do it without equalising the funding formula, and you don't end the injustice, you bake it in. Durham raises less, gets no more, and it's our statutory services like Looked After Children and Adult Social Care that pay. I am not remotely convinced that Labour’s London and South East MPs would allow such a proposal to proceed.”
Glen Sanderson, the Conservative leader of Northumberland County Council, said he would prefer council tax to remain but with greater resources from Whitehall to reduce bills. He added: “Our Government settlement has been at or below inflation for many years and that would be fairer.” He expressed hope for a dialogue with the Prime Minister.
Burnham's comments and Downing Street denial
Speaking on the BBC’s Panorama programme, Burnham said some people in his former Greater Manchester mayoral area “pay a much higher council tax than people living in much larger homes in London”. He added: “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.”
However, Downing Street later said it was untrue that the PM was actively considering removing council tax. Burnham also told reporters that reports he planned to scrap stamp duty “won’t be happening”.
