Westminster Council leader Paul Swaddle has warned incoming Prime Minister Andy Burnham not to "diminish London" in an effort to boost the north of England, as the borough faces a £100 million blackhole in its finances that could force huge council tax increases on residents.
In a letter to the new prime minister, Swaddle wrote that "the route to a stronger national economy cannot be to diminish London." He argued that weakening the capital would reduce the tax base, investment pull, visitor economy, and global competitiveness on which the whole country depends.
Westminster's Financial Blackhole
The borough is facing having to impose significant council tax rises on its residents to plug a £100 million deficit after a reevaluation of government funding. This comes as Burnham has braced wealthier individuals in London for potential tax increases to ease the burden on the less well-off. He has previously supported a new property tax, which, if adopted, would see a majority of households in the capital paying more, according to an analysis.
Chancellor Rachel Reeves last year also announced that Labour would implement a new "mansion tax" on properties valued at over £2 million.
Swaddle's Warning on High Value Council Tax Surcharge
Swaddle specifically criticised the proposed High Value Council Tax Surcharge, arguing that it would fall especially heavily on Westminster, where high property values do not always translate into high household incomes. He warned that the surcharge risks creating unfair outcomes for long-standing residents in high-value homes, leaseholders, tenants who may see costs passed through rents, and homes that do not fit neatly into the government's assumed model of wealth.
"Westminster does not support the surcharge, either in principle or design," Swaddle wrote. He added that the government should review existing policy areas that would cut across the growth mission.
Burnham's Pledge to Be Leader for All
Burnham, the former Manchester mayor, is set to become Britain's sixth prime minister in a decade on Monday. He has faced accusations that he is pro-north at the expense of London and the south. However, in his speech accepting the Labour leadership on Friday, he pledged to be a leader for all of Britain.
"I will be a leader for the north, the south, the east, and the west, for Scotland, Wales, and for Northern Ireland," he said. "Yes, the north of England has given me so much, everything, in fact. And in return, I have sought to give it the strongest voice I could. That was my job, but now I do the same for everywhere, because I see the same challenges everywhere I look."
Impact on National Economy
Swaddle emphasised that the UK does not have a London problem but a national growth problem. He stated that a stronger Manchester, Birmingham, Leeds, Liverpool, Newcastle, Cardiff, Glasgow, and Belfast are essential to the country's future, but so is a stronger London. "If the capital becomes less competitive, the whole country will feel the consequences through weaker tax receipts, lower investment, reduced visitor spending and a smaller global platform for UK business," he concluded.
