Prime Minister Andy Burnham has indicated that homeowners in southern England may face higher property taxes as part of a broader effort to reform the council tax system and fund social care and defence priorities. Speaking in his first comprehensive interview since taking office, Mr. Burnham outlined potential changes aimed at addressing regional disparities in council tax burdens, particularly the imbalance between northern and southern England.
Council tax rates, currently based on property valuations from 1991, have come under scrutiny for perpetuating significant inequalities. For example, residents in Hartlepool pay an average Band D council tax of £2,556—more than twice the £1,047 paid by Westminster homeowners—despite property values in Hartlepool averaging £131,000 compared to £836,000 in Westminster. This discrepancy means Hartlepool residents pay proportionally 13.5 times more relative to their home value than those in the capital.
To tackle this, Mr. Burnham has suggested reforming the tax framework by introducing a land tax, which would levy charges based on the value of land rather than buildings. As the land value is high in areas like London, this change would increase tax bills in southern regions while reducing them in northern areas where land values are lower. The idea has reportedly garnered support from over 100 Labour MPs, and Mr. Burnham has expressed backing for such a levy in the past.
Alternatives under consideration include replacing council tax and stamp duty with a proportional property tax—an annual flat rate based on home values. For instance, a property valued at £836,000 in Westminster would face a £2,247 annual charge under this system, more than doubling the current council tax. Additionally, Mr. Burnham has not dismissed lowering the threshold for the existing “mansion tax” from £2 million to £1.5 million, potentially expanding its scope.
During the interview, he highlighted the unfairness in the current system, noting that some people in Greater Manchester pay more council tax than owners of larger properties in London. He endorsed former Chancellor Rachel Reeves’ earlier moves to reform council tax to create greater fairness aligned with property values.
The Prime Minister also hinted at introducing a 10 percent inheritance tax on all estates to help finance social care reforms. He referenced similar proposals he made during his tenure as health secretary under Gordon Brown. The new tax would apply universally, potentially increasing the number of estates subject to fees, as current rules allow married couples to transfer up to £1 million tax-free.
Mr. Burnham’s wider reform agenda faces political challenges. He dismissed calls for an early general election despite pressure from opposition parties and some within his own party after his firm announcements on nationalisations and devolution plans. He insisted his government has legitimacy as long as it commands a Commons majority and suggested that voters had already expressed their views.
On welfare policy, Mr. Burnham signaled forthcoming tougher measures on sickness benefits, including stricter requirements for younger recipients to engage in training or voluntary work. This approach aims to curb the nation’s £33 billion welfare expenditure, despite earlier Labour resistance to cuts under Sir Keir Starmer.
On defence spending, the Prime Minister stopped short of committing to reach an annual defence budget equivalent to 3 percent of GDP by 2030—a target set by his predecessor and demanded by prominent party members. He stressed ensuring full funding for current defence investment plans as the immediate priority, with further decisions expected ahead of the upcoming budget.
His new chancellor, John Healey, appointed last week, had previously resigned as defence secretary amid disagreements over this commitment. Meanwhile, Defence Secretary Wes Streeting publicly stated willingness to resign if the 3 percent spending target is not met, underscoring continuing internal debate over defence priorities.