London and South East on alert as PM hints at council tax overhaul

See more Daily Mail on Google - save us as a Preferred SourceBy JAMES TAPSFIELD, UK POLITICAL EDITOR Published: 09:43 BST, 2 September 2026 | Updated: 09:46 BST, 2 September 2026

Andy Burnham has put London and the South East on high alert for a huge raid to boost 'fairness'.The PM gave a fresh hint at a council tax revaluation that could hammer families in areas where property prices have spiked over the past 30 years.The comments - made during his Commons debut last night - came as ministers scramble for ways of balancing the books and funding new spending commitments. Labour MP Jonathan Brash asked if Mr Burnham was still committed to replacing the 'hated council tax system' because people in the North were paying too much.The premier responded that he could not go 'all the way' immediately, but added: 'A council tax system based on 1991 valuations is not going to deliver fairness across the country.' Andy Burnham gave a fresh hint at a council tax revaluation that could hammer families in areas where property prices have spiked over the past 30 years

Referring to Labour moves to redirect central Government funding away from London and the South East, the premier said the 'first steps at reform were taken in last year’s Budget'. 'We need to proceed with consensus on this issue, if we can. I understand what he is saying, but the more wholesale reform might have to wait for another day,' he said.Governments have long stopped short of ordering an England-wide revaluation for council tax for fear of sparking fury among voters. Opponents point out that residents in London and the South East routinely take on bigger mortgages due to the higher property prices, and are not necessarily better off.Others bought homes when values were lower and would struggle to pay higher annual charges. Mr Brash complained that a typical band D household in his Hartlepool constituency pays £2,556 a year compared with £1,048 in Westminster - which is known for extremely low council tax.However, in Croydon the annual charge is £2,599, in Reigate & Banstead £2,566, Lewes residents pay £2,756 and in Wealden the level is £2,728.Mr Burnham has previously talked up his determination to overhaul the tax system, with huge pressure from MPs to raise more cash for spending.He has said he is 'persuaded' of the argument for a Land Value Tax (LVT), which would be based on the undeveloped value of land.However, it is far from clear how the details would work in practice. And recent modelling from Tax Policy Associates has underlined the huge impact there could be on the capital and surrounding counties - while other areas benefit. The think-tank found that an annual levy of 1.28 per cent of the land value would roughly cover the current revenues from council tax and stamp duty.But the estimates - which they stressed were only illustrative - suggest that owners of a band F flat in Islington would be paying £12,000 a year, instead of £2,900 in council tax. Someone who bought a band H property in Westminster or Kensington that has soared to be worth millions of pounds would need to find £44,000 and £54,000 respectively. Modelling from Tax Policy Associates underlined the huge impact on the capital and surrounding counties - while other areas could benefit Outside the M25, the owner of a band F home in Guildford would be facing a £6,200 a year charge, instead of £3,500 in council tax at present. A band F in Brighton attracts similar council tax currently, but would be in line for an £8,700 annual bill.The report suggested there could be transitional arrangements, including credits offsetting stamp duty already paid.But it also highlights that postponing collection of the tax would mean the percentage charge has to be significantly higher.The model projects eye-watering property falls in the areas affected, such as a 19 per cent plunge for average homes in Richmond-Upon-Thames.