Labour is reportedly considering a substantial increase in council tax, with projections suggesting an £18 billion rise nationally by 2030. This potential surge, dubbed the “Burnham premium,” could see average council tax bills rise by approximately £500.
According to figures obtained by The Telegraph, the Treasury’s total council tax income is expected to grow by 43 per cent by 2030. This increase would translate to an additional £500 on average council tax bills by the end of the decade.
Conservative figures, including Kemi Badenoch, have cautioned that Mayor Andy Burnham’s approach to extending fiscal devolution to regional mayors might push council tax bills even higher. Mr Burnham, who succeeded Sir Keir Starmer as Labour Party leader earlier this month, faces scrutiny over these plans.
In the 2024/2025 financial year, the Treasury collected £41.2 billion from council tax. However, estimates released through parliamentary questions suggest that this figure could soar by over £17 billion to £58.8 billion by 2030/31.
Looking at the breakdown across the eight council tax bands, the average increase would be around £556. For residents in Band D properties, this would mean an annual rise of £556 in their council tax by 2030.
Specifically, the Band A council tax rate is projected to climb to £2,836 by 2030/31, up from £2,280 currently, based on analysis by The Telegraph and Conservative Party data.
Sir James Cleverly, Shadow Secretary of State for Levelling Up, Housing and Communities, criticised the proposal, stating: “Andy Burnham is right to want to boost growth across our communities. But his model of Manchesterism is a recipe for soaring taxes in every postcode.
“Labour have already incorporated £18 billion of council tax increases. Now the former Manchester mayor Burnham wants to go further and impose his high-tax regional model across England.”
Addressing these concerns, Mr Burnham highlighted the need to tackle perceived unfairness in the current council tax system. Speaking to Laura Kuenssberg on the BBC’s Panorama programme, he remarked: “There are people here in Greater Manchester who pay much higher council tax than those living in much larger homes in London.
“The previous Chancellor, Rachel Reeves, was right to begin reforming council tax to create some fairness, especially given that many homes of greater value haven’t seen their council tax increase due to the failure to revalue the banding.
“So that’s an example of something I think was right and fair.”
He added: “We need to honour the manifesto upon which Labour was elected, and if I were to propose any changes, people would rightly ask if this aligns with that manifesto.
“So there are big decisions ahead, you are right about that.”
Mr Burnham has also expressed that he has been “persuaded” by arguments in favour of reforming the council tax system, indicating potential willingness to consider changes in the near future.