Hundreds of thousands of Londoners could see their property tax bills rise by nearly £1,000 a year under a land value levy backed by Andy Burnham – who faces voters in the crucial Makerfield by-election on Thursday. The Greater Manchester mayor has long called for replacing council tax and stamp duty with a land value tax (LVT), a proposal that would hit the capital hardest because of its higher property values.
Analysis by Vahid Ahmadi and Max Ghenis for Policy Engine found that on a cost-neutral basis, the bottom income decile would gain £481 a year on average, while the ninth decile would pay £991 more and the top decile £966 more – many of them living in London. “I’ve long been persuaded of the argument for a land value tax,” Burnham said recently. “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.” Five years ago he argued: “The party can’t tiptoe around it any more. Council tax is bearing too much weight.”
“Andy Burnham-backed land value tax could cost Londoners £1,000 more as he contests Makerfield by-election.”
Burnham is seeking to oust Sir Keir Starmer as Labour leader by returning to Parliament through the Makerfield by-election, but his path is far from certain. In the most recent local elections, every council ward in the constituency went Reform UK’s way, with Nigel Farage’s party securing 50% of the vote against Labour’s 25% – Labour’s worst ever performance in Wigan. Reform candidate Robert Kenyon is standing against Burnham. New Statesman modelling suggests that without the “Burnham effect”, Reform would win by 14 points. Yet factoring in Burnham’s personal popularity – he is the most liked politician in British politics – and tactical voting, his lead could grow to over 5 points, with the Burnham effect adding 16 points to Labour’s vote share.
The by-election also features Restore Britain, a new party that could expose a weakness on Nigel Farage’s right. Britain Predicts models show Restore’s impact would not decide the winner but could cost Reform 5 points or more across Great Britain, reducing their Commons seats from 300 to 220, with Labour the main beneficiary.
Burnham first floated the LVT in 2010 during his initial Labour leadership bid, saying it “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.” But tax reform remains politically perilous: voters who lose out tend to resent it far more than beneficiaries welcome it. If Burnham does become prime minister, his radical property tax shake-up could become a defining battle – one that may start costing Londoners hundreds of pounds from the moment it lands.