"Big decisions" ahead on council tax as UK PM notes 'unfairness'

Andy Burnham has said his government is facing "big decisions" about council tax, as he criticised the unfairness of the current system where some people outside London pay higher rates than those living in the most expensive homes in the capital.

The prime minister acknowledged he needed to stick to the manifesto Labour was elected on in 2024 but said he understood how people felt the current system was disproportionate.

It came as Number 10 denied the government was considering replacing council tax and stamp duty with a tax based on property or land values.

Speaking to Laura Kuenssberg on the BBC's Panorama programme, Burnham said: "There are people here in Greater Manchester who pay a much higher council tax than people living in much larger homes in London.

"So the chancellor before, Rachel 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.

"So that's an example of something that I think was right and fair."

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."

Burnham has previously said he has been "persuaded" of the argument for reforming the system.

However, on Sunday night, Number 10 denied reports by the i Paper he was actively considering replacing council tax and stamp duty with a 0.48% annual charge on a home's current value, or a land value tax.

According to the Fairer Share Campaign, the flat-rate annual charge could save households in areas such as Hartlepool about £950 a year.

Stamp duty is paid on sales from £125,000 upwards, although first-time buyers benefit from not having to pay any on purchases up to £300,000.

However, the relief ends at prices over £500,000.

Labour has come under pressure from its backbenches to reform council tax, including from chairman of the cross-party group of MPs on council tax reform, Jonathan Brash.

The Labour MP for Hartlepool told the i Paper "wholesale reform" was needed.

Brash has previously pointed to band A homes in Hartlepool paying nearly 2.5 times more than in Westminster.

He said: "Council tax is one of the most unfair taxes in Britain, and nowhere is that injustice clearer than in towns like Hartlepool."

The Conservatives criticised any potential change as Labour "looking for more ways to tax middle England".

Shadow housing secretary James Cleverly said: "Andy Burnham and Labour are just looking for more ways to tax middle England, and raise taxes on people's homes."

"Replacing council tax and stamp duty with a new house price tax would not be a tax cut for hardworking families – quite the reverse: people across England would end up paying more.

"This is just smoke and mirrors from the party that has already hiked both council tax and stamp duty.

"The Conservatives are the only party that will keep tax on the family home down – including by scrapping stamp duty entirely for primary residences."

By Harry Taylor, Press Association Political Staff

source: PA

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