Labour’s £18 billion council tax raid warned to hit 25 million homes

By the Editorial Team · Friday, July 31, 2026

Labour's proposals to raise council tax in England could increase bills for over 25 million households by 2030, with average Band D payments rising from £2,280 to about £2,836 and total revenue growing nearly 43 percent. The plan also includes granting metropolitan mayors partial control over local income tax to promote economic growth, though critics warn this may lead to higher taxes and uneven impacts across regions.

Labour’s proposals to increase council tax in England could lead to a significant rise in bills by 2030, affecting more than 25 million households, figures obtained ahead of upcoming policy announcements indicate. The planned changes are expected to boost the national council tax revenue by about 43 percent, reaching nearly £59 billion by 2030-31, which would translate to an average Band D household’s bill rising from £2,280 in 2024-25 to approximately £2,836.

These projections stem from data provided to the Office for Budget Responsibility, marking the first time the government has publicly outlined its expectations for total council tax revenue in England alone. The anticipated annual increase in council tax is estimated between 4.3 and 4.4 percent, which significantly exceeds the current Consumer Price Index inflation rate of 2.6 percent.

The proposed increase has drawn criticism from Conservative figures, who have described it as an “£18 billion council tax raid” coinciding with Labour’s broader plan to extend fiscal devolution to regional mayors. Sir James Cleverly, the shadow communities secretary, argued that Labour’s approach, particularly under Labour politicians like Greater Manchester Mayor Andy Burnham, would impose what he called a “Burnham premium” on taxpayers. Cleverly pointed to Burnham’s record, noting that since his election in 2017, the mayoral council tax precept in Greater Manchester for Band D properties has more than doubled, rising from £68 to £154.

Cleverly also cautioned that the expansion of mayoral powers, which could include the ability to add a precept to council tax bills, risks pushing rates even higher across England. He described the planned reforms as “top-down regionalism,” warning that policies successful in urban centers like Manchester might not suit regions such as Essex, Cornwall, or Cumbria.

The Ministry of Housing, Communities and Local Government (MHCLG) responded by emphasizing that councils have not yet set tax rates beyond the current year and that any future decisions will reflect a range of local factors. A spokesperson stressed the importance of considering the impact on taxpayers and rejected claims suggesting rates have already been fixed.

Separately, plans are expected to be announced that would grant mayoral authorities access to a share of local income tax revenue to incentivize economic growth. This “income tax sharing” scheme is likely to apply to the seven most senior metropolitan mayors, six of whom are Labour incumbents, including leaders in London, Liverpool, and Greater Manchester. Officials involved in the policy development believe allowing mayors to benefit directly from economic growth will encourage targeted efforts to improve transport, housing, and employment opportunities.

Andy Burnham is anticipated to frame these changes as empowering local leaders with greater financial resources to drive development. However, Conservative critics maintain that devolving tax powers in the current model could lead to uneven outcomes and higher tax burdens for ordinary families. The government has yet to specify the exact amount of income tax revenues that mayors would control, with final decisions expected to be detailed in the forthcoming Budget.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.