Andy Burnham raises fears of higher council tax for homeowners in the South as PM warns of ‘unfairness’

Andy Burnham has voiced fears of higher council tax for homeowners in the South, claiming there is an ‘unfairness’ in the current system.

The Prime Minister said former Chancellor Rachel Reeves was ‘right to start’ reforming council tax after she introduced a so-called ‘mansion tax’ surcharge on high-value homes.

He hinted that further changes could be in store during his time as prime minister, pointing out that some homes in the North West pay higher council tax than larger homes in London.

It comes as Downing Street seeks to quash suggestions that the Government is actively considering replacing council tax and stamp duty with a tax based on property or land values; This led to Tory claims for a new raid on Central England.

Speaking to the BBC’s Laura Kuenssberg, Mr Burnham was asked whether rich Britons would be prepared to pay more taxes now that he is in power.

He replied: ‘Let me answer this way, you know, there are people here in Greater Manchester who pay much higher council tax than people living in much larger houses in London.

‘So previously the Chancellor, Rachel Reeves, was right to start reforming council tax to create some fairness there in relation to people whose homes were of much greater value and who had not seen their council tax increase over the years because of the banding not being reassessed.

‘So, you know, this is an example of something that I think is right and fair.’

The Prime Minister has pledged to keep promises made in Labour’s manifesto not to increase income tax, National Insurance or VAT, but has previously said there is ‘some leeway’ on the tax in the document.

In the BBC interview, Mr Burnham added that there were ‘big decisions ahead’ on council tax but insisted he would take a ‘cautious approach’ to the country’s finances.

‘We need to honor the manifesto on which Labor was elected and if I were to put forward any changes, of course people would rightly ask ‘is this consistent with that manifesto?’ ‘ he will ask.

‘So you know, we have big decisions ahead of us, you’re right about that. I have to be very cautious when it comes to public finances.

‘I’m going to stick to the fiscal rules and I know people are trying to create the perception that I’m not going to take this cautious approach, I’m going to take this cautious approach.’

Mr Burnham has previously said he was ‘persuaded’ by the argument for reforming the council tax system.

But Downing Street said suggestions that the Prime Minister was actively considering abolishing council tax or stamp duty were ‘untrue’.

The Prime Minister’s official spokesman added: ‘As always, tax-related decisions are a matter for the Chancellor [John Healey] to set off in financial activities.’

The government has come under pressure from Labor backbenchers to reform council tax, including Jonathan Brash, chairman of the cross-party group of MPs on council tax reform.

The Hartlepool Labor MP told i Paper that ‘wholesale reform’ was needed. Mr Brash has previously stated that Group A homes in Hartlepool pay around 2.5 times more than those in Westminster.

He said: ‘Council tax is one of the most unfair taxes in Britain, and nowhere is this injustice more evident than in towns like Hartlepool.’

But the Conservative Party has warned that any potential changes could mean Labor ‘looking for more ways to tax middle England’.

Shadow housing secretary James Cleverly said: ‘Andy Burnham and Labor are looking for more ways to tax middle England and increase taxes on people’s homes.’

‘Replacing council tax and stamp duty with a new house price tax would not be a tax cut for hard-working families; quite the opposite: people across the UK will have to pay more.

‘This is just smoke and mirrors from the party that has increased council tax and stamp duty.

‘The Conservatives are the only party that will keep tax on family homes low; ‘This includes the complete removal of stamp duty for primary homes.’