‘Labour needs a big, bold cost-of-living win – property tax reform can deliver’

The latest polling makes particularly uncomfortable reading for Labour. The party now faces pressure on three fronts: Reform surging on its right, the Greens and Liberal Democrats consolidating disillusioned left and centrist voters, and growing unease on the Labour backbenches.

That makes the government’s renewed focus on the cost of living both necessary and politically savvy. Voters across the spectrum want action. But incremental tweaks, long interviews, and lists of achievements aren’t cutting through. They don’t feel big enough, and they don’t feel fair enough.

If Keir Starmer is to stabilise his coalition, he needs bold, eye-catching policies that do three things at once: deliver tangible gains for millions of households; clearly demonstrate who Labour is prepared to stand up for and stand up to; and speak to voters drifting not just to Reform, but also to the Greens and Liberal Democrats.

READ MORE: ‘The cost of living will keep biting until Britain fixes growth’

There is a policy that does all three, and it builds directly on steps the government has already taken.

In the Autumn Budget, the Chancellor announced a new ‘mansion tax’ on the most valuable homes. That move has several things going for it. The new higher council tax bands are progressive, asking more of those with the broadest shoulders. It will be based on current property valuations, breaking decades of reliance on valuations from 1991 to set bands. And it included deferral mechanisms, allowing asset-rich, cash-poor households to pay later — addressing one of the most common objections to property taxation.

But the logical next step is to go further. Scrapping council tax and stamp duty, and replacing them with a single annual Proportional Property Tax based on current values, would be one of the most powerful cost-of-living interventions a government could make – without costing the Treasury a penny.

This reform, championed by Fairer Share, the national campaign to reform council tax and stamp duty, would cut taxes for 77 per cent of households. Our analysis shows it means an average saving of £556 a year for around 18 million families. A Proportional Property Tax would end the absurdity of a system in which families in modest homes, including many renters, routinely pay more in council tax than owners of multi-million-pound properties simply because of their postcode.

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Just as importantly, the politics stack up. New polling by Merlin Strategy for Fairer Share shows significant net support for replacing council tax with a proportional property tax among voters currently planning to vote for every major party in England — whether Reform, Conservative, Green, Liberal Democrat or Labour. Support outweighs opposition by wide margins across the board.

Reform supporters back it by almost two to one. They are the most likely of any party’s supporters to say it would “very positively” affect their cost of living. Meanwhile Liberal Democrat and Conservative supporters back the reform by more than three to one, and Labour and Green voters back it by more than eight to one.

It’s not a niche idea – it has the potential to unite not only voters across the political spectrum, but restless MPs whose loyalty Starmer now needs. Backing for reform stretches across Labour’s internal spectrum too: from Blue Labour champions Jonathan Brash and Jonathan Hinder, to Red Wall caucus convenor Jo White, to Socialist Campaign Group members such as Andy McDonald, and Progress co-founder Liam Byrne.

Few policies can unite such a broad coalition. Fewer still allow Labour to significantly undercut rival parties’ cost of-living offers, while reinforcing its credentials on fairness.

The case for reform is straightforward. Council tax is still based on valuations carried out over a third of a century ago. In effect, homeowners in areas of rapid house-price growth have enjoyed a three-decade tax holiday, while everyone else has paid the price.

No serious tax system would tolerate that. Voters increasingly don’t either: a large majority of supporters of all five parties agree that properties should be revalued so taxes reflect today’s market.

Of course, some wealthy and well-organised homeowners would object. But the Mansion Tax has already shown how those concerns can be managed, through careful valuation, clear thresholds, and deferral options. Politically, that resistance may be an asset rather than a liability: voters want to see clearly who Labour is prepared to challenge.

The government already has a practical route forward. Planned consultations on new higher council tax bands provide the perfect launchpad for full revaluation. Publishing that data would expose the scale of under-taxation at the top end, not just for £2m-plus homes, but for many high-value properties currently sitting comfortably in frozen bands.

New bands are welcome. But on their own, they are a sticking plaster on a fundamentally broken system.

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Keir Starmer warned against “sticking-plaster politics” in his New Year message two years ago – lamenting Westminster’s tendency for short-term fixes over long-term cures.

Reforming Britain’s property taxes would show he meant it. And if Labour is serious about rebuilding its electoral coalition — from Reform-leaning voters, to Green-curious urban seats, to frustrated MPs on Labour’s backbenches — it is a reform whose time has clearly come. 

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