‘Why Land Value Tax is the key to real devolution’

In my previous piece for LabourList, I argued that Britain’s broken, regressive property tax system demands bold, systemic reform. Council Tax, frozen in 1991, economically damaging Stamp Duty, and punitive Business Rates do nothing but entrench inequality and stifle local growth. For a Labour government aiming to build an economy that works for the many, Land Value Tax (LVT) represents the most rational, growth-friendly path forward.

But the case for LVT extends far beyond national Treasury spreadsheets. If we are serious about shifting power out of Westminster, LVT is the foundational tool required to make regional devolution a reality. This reality was brought into sharp focus by Andy Burnham’s major policy speech at the People’s History Museum in Manchester.

Championing a philosophy he terms “Manchesterism,” Burnham laid out a sweeping vision for his forthcoming administration, headlined by a “No. 10 North” to coordinate regional growth and a radical overhaul of business rates. While his immediate focus is on practical adjustments—like slashing hospitality rates and penalising giant online distribution warehouses—these proposals directly align with his long-standing advocacy for LVT. Burnham has consistently argued that “land is under-taxed”. By blending his fiscal localisation strategy with the principles of LVT, we can fundamentally supercharge UK devolution in three key ways.

READ MORE: ‘A ten-point plan for ending trickle-down economics’

Smashing the “Whitehall Cap” with Financial Autonomy

True devolution cannot exist on an allowance. Currently, metro mayors and local councils are trapped, heavily relying on central government grants or highly regressive, outdated tax systems. As Burnham rightly points out, it is absurd that a modest family home in Blackpool can face a comparable tax burden to a multimillion-pound property in London due to outdated Council Tax bands.

To fund local infrastructure, leaders shouldn’t have to “beg” Whitehall. Transitioning toward an LVT—or a Proportional Property Tax as a stepping stone—allows local authorities to capture revenue directly from the unimproved value of the land itself. Because land value is largely created by the community through infrastructure, schools, and jobs, capturing this wealth locally grants regions stable, independent funding. This breaks the financial leash, giving areas like Greater Manchester the genuine autonomy to invest in their own futures.

Ending the “Housing Trap” and Spurring Regeneration

In his Manchester address, Burnham prioritised lifting Britain out of a chronic “housing trap” by accelerating council house building and revitalising empty town centres. Our current system penalises progress; if a developer improves a site, their taxes rise, but if they leave a storefront vacant or a plot empty, they face little penalty.

Become a friend of LabourList and join our community. Our friends support our vital non-factional work and get access to exclusive content and events. 

An LVT flips this incentive structure. By taxing the underlying value of the land regardless of what is built on it, land banking and speculation become financially unsustainable. Speculative landlords can no longer hoard vacant sites in hope of unearned windfalls. This creates a highly productive form of taxation that forces development, empowering combined authorities to reclaim brownfield sites and transform them into affordable homes.

Rebalancing Wealth Across the Postcodes

Devolution only succeeds if regional economies possess the baseline wealth to sustain themselves. Because land values are exponentially higher in London and the South East, LVT naturally shifts the national tax burden onto these high-value areas.

This shift provides a massive financial breather to middle and lower income postcodes across the North, Midlands, and coastal towns. By freezing or reducing the tax burden on working families, we free up local household income. This keeps wealth circulating within the regional economy rather than draining back into the capital, fostering what Burnham calls “good growth in every postcode.”

The Rational Path Forward

Burnham’s call for a “No. 10 North” and immediate business rates reform shows that the appetite for radical decentralisation is there. But temporary tweaks to business rates are just the beginning.

To permanently shift civil service power and economic gravity away from London, we must alter the tax foundation beneath our feet. As the Labour Land Campaign has long championed, LVT is not a radical fringe theory; it is a market-efficient, progressive mechanism backed by modern digital mapping and Land Registry data.

If Labour wants to deliver on the promise of national renewal, it should look to the trailblazing vision emerging from the North. By backing Land Value Taxation, the party can provide leaders like Andy Burnham with the permanent fiscal teeth needed to make devolution a lasting success.

Subscribe here to our daily newsletter roundup of Labour news, analysis and comment– and follow us on TikTok, Bluesky, WhatsApp, X and Facebook. You can also write to our editor to share your thoughts on our stories and share your own. The best letters are published every Sunday.

• • SHARE: If you have anything to share that we should be looking into or publishing about this story – or any other topic involving Labour– contact us (strictly anonymously if you wish) at [email protected].
  • SUBSCRIBE: Sign up to LabourList’s morning email here for the best briefing on everything Labour, every weekday morning.
  • BECOME A FRIEND: If you enjoyed this, why not consider becoming a Friend of LabourList? Help sustain our journalism, and of course Friends do get benefits…
  • PARTNER: If you or your organisation might be interested in partnering with us on sponsored events or projects, email [email protected].
  • ADVERTISE: If your organisation would like to advertise or run sponsored pieces on LabourList‘s daily newsletter or website, contact our exclusive ad partners Total Politics at [email protected].