Andy Burnham has called for a radical shake-up of taxes in Britain that could hit land and property owners in London and the southeast with a new levy based on the value of their assets.
Launching his campaign to return to Westminster, the Greater Manchester mayor said he wanted to reform the “regressive” council tax system and favoured a land value tax to be paid on the market rental value of land.
The change would increase taxes on homeowners in parts of the country such as London and the southeast where land is more valuable, while reducing charges in areas of the country where it is cheaper.
Burnham also said he backed scrapping inheritance tax and replacing it with a levy on all estates to pay for the reform of social care. However he ruled out increasing income tax, national insurance or VAT if he becomes Britain’s next prime minister, saying he would stick by Labour’s existing manifesto commitments.
The Greater Manchester mayor is looking to beat Reform UK in next month’s Makerfield by-election, which he hopes to use as a springboard to enter Downing Street. Burnham said the by-election was a “clarion call for change” adding that Labour needed to be “better than we have been” in government.
“A vote for me in this by-election is a vote to change Labour,” he said.
In interviews, Burnham said: “I’ve long been persuaded of the argument for a land value tax. I’m personally keen to see reform of council tax. It’s a highly regressive tax. I see a big case for land and property and business taxation to be changed.”
The UK already taxes property more heavily than other advanced economies, according to figures from the Organisation for Economic Co-operation and Development that measure revenue as a share of GDP. This reflects the effect of multiple levies, including stamp duty, council tax and business rates.
Burnham has previously suggested that a land value tax could replace council tax or stamp duty, which many economists argue damages economic growth. In 2021 he said: “There is a really interesting discussion about how we reform property tax. The party can’t tiptoe around it any more. Council tax is bearing too much weight.”
One source familiar with Burnham’s thinking said he had long thought council tax was unfair and should eventually be abolished. Burnham did not say whether it was a policy he would try to develop before any election but said there was “space to be more radical” within Labour’s existing manifesto.
He also said he would want to look “in detail” at proposals for a so-called “wealth tax” by his leadership rival, Wes Streeting. This would potentially involve equalising rates of income tax and capital gains tax to raise taxes on those who make money from investments.
Streeting confirmed on Thursday he would back a wealth tax and suggested in an interview with The Guardian that he would look at changing inheritance tax too.
The former health secretary told the paper that he had not launched a leadership campaign before Burnham was able to return to Westminster because it would have looked like he was pulling a “fast one”, however he said it was “inevitable” that Sir Keir Starmer would leave No 10.
In a separate interview Streeting told The Mirror he would use the wealth tax to “fund the full restoration of Sure Start [a government initiative supporting families with children under five]”. He said he knew he would be the “underdog” in any leadership race, but added: “I’ve been the underdog all my life. I’ve had to beat the odds.”
Burnham also said he was in favour of changing the voting system at Westminster to bring in a form of proportional representation but said this would only form part of Labour’s pledges at the next election. “Any move in that direction is going to be good,” he said. “I would want a commitment in the next Labour manifesto to introduce a proportional system.”
Burnham has talked about reforming land taxation for years. During his failed 2010 Labour leadership campaign, he called for a land value tax, which he said was “an idea so Old Labour it can be traced back to Thomas Paine”.
“The LVT, an annual tax on the market rental value of land, would allow for the abolition of stamp duty — a tax on the aspiration of young people to put down roots and get on with life,” he wrote in the Guardian in 2010.
Burnham said a new “visitor levy” on hotels in some areas, which he has lobbied hard for as mayor, could be used to lower business rates for the hospitality sector. Under current plans, the use of that levy is devolved to English mayors.
He has also spoken of stronger public control over utility companies. “I use that phrase advisedly. People then shorthand it as nationalisation; it’s not the same thing,” he said, pointing to Greater Manchester’s bus services, which are run by private operators.
“Thames Water, for instance, you don’t just say ‘nationalise water’. You could have a localised public control option there.”
A Burnham spokesperson said: “Andy did not propose any changes to the tax system. He was clear he supports the 2024 Labour manifesto, which commits to a fair taxation system and to upholding fiscal rules. He supported the high-value council tax surcharge in the recent budget.
“As mayor of Greater Manchester he saw first-hand how the existing council tax system needs reform. As mayor he had very limited powers over council tax and no say over the tax system as a whole. It is one of the reasons he is standing to be MP for Makerfield.”
