We welcome the publication of a new report from the Labour Together, Fixing the shop front of the state, which highlights the growing crisis in local government finance and the urgent need for reform of the UK’s property tax system.
Local government is often described as the “shop front of the state” – the part of government people encounter most directly in their daily lives. From social care to waste collection, planning to libraries, councils provide the services that shape how people experience the state itself.
The report sets out how this shop front is under increasing strain, with councils across the country facing severe financial pressure while council tax bills continue to rise. As the paper argues, the problem is not only about the level of funding, but about the way the system raises money in the first place.
A growing consensus on property tax reform
Fairer Share has long argued that the current system of Council Tax and Stamp Duty is outdated, unfair, and no longer fit for purpose.
Council Tax in England is still based on property values from 1991, and its banded structure means households in lower-value homes often pay a higher share of their income than those living in more expensive properties. Stamp Duty, meanwhile, discourages people from moving home and creates distortions in the housing market.
We therefore welcome the report’s recognition that a Proportional Property Tax offers a fairer and more sustainable alternative.
A system based on up-to-date property values, where everyone pays the same percentage, would be simpler, more transparent, and better able to provide stable funding for local services.
Tax reform should not be delayed
The report discusses property tax reform alongside wider changes to the funding of adult social care and local government finance.
While these issues are closely connected, Fairer Share believes reform of property taxation should stand on its own merits. A fairer system could be introduced to deliver an immediate annual tax cut of £556 on average for 76% of households.
Delaying reform risks prolonging a system that is widely seen as unfair and increasingly difficult to sustain.
Time for a full review
There is now growing agreement across the political spectrum that the current system of Council Tax and Stamp Duty is broken.
The next step must be a full, independent review of property taxation, so that the UK can move to a system that is fairer for households, more stable for local government, and better suited to the modern housing market.
👉 Sign the petition calling for a full independent review of Council Tax and Stamp Duty here.