Since taking office, Labour has had the chance to show its commitment to fairness and change. But one question looms large: how will Labour safeguard the Red Wall constituencies that helped secure its majority? While national debates over the NHS, energy, and the economy dominate headlines, local issues often hold the key to winning voters’ trust. One such issue is the broken and deeply unfair Council Tax system. Reforming it presents both a pressing necessity and a significant opportunity for Labour.
A Broken System That Penalises the Poor
Council Tax, introduced as a replacement for the Poll Tax in 1993, is based on property valuations frozen three decades ago. The result? A system that disproportionately burdens lower-income households—especially in Labour heartlands like the Red Wall—while offering generous breaks to the wealthiest.
Take this example: a family living in a £230,000 home in Hartlepool pays over £2,000 annually in Council Tax. Meanwhile, a household in a property worth £8 million in Westminster pays significantly less in Council Tax, highlighting a stark disparity. This injustice is glaring, perpetuating regional inequality and penalising working-class families.
Despite this, successive governments have dodged meaningful reform, fearful of upsetting affluent voters in Tory strongholds. Labour cannot afford such timidity. It must lead the charge, offering a bold and modernised vision for a fairer system.
A Growing Threat from Nigel Farage and Reform UK
Labour’s opportunity to address Council Tax reform comes with a warning: inaction could cost dearly. Nigel Farage and Reform UK are circling, capitalising on immigration concerns and deep-seated economic frustrations in Labour’s traditional heartlands. Farage, with his trademark populist rhetoric, is positioning himself as the voice of the “forgotten working class.”
The Council Tax system is fertile ground for this narrative. Farage does not need detailed solutions; he simply needs to highlight Labour’s perceived inaction. By failing to address the issue, Labour risks ceding ground to a party that thrives on disillusionment and anger. Reform UK may lack substance, but their ability to capture attention cannot be underestimated. Labour must act decisively to neutralise this threat and take ownership of the issue.
The Case for Proportional Property Tax
The solution is straightforward and long overdue. The Fairer Share campaign has long advocated replacing Council Tax and Stamp Duty with a Proportional Property Tax (PPT). Under this model, households would pay a fixed percentage of their property’s current market value. The tax would be fairer, more transparent, and less regressive.
The benefits are compelling. Fairer Share’s analysis shows that 77% of households would pay less under PPT, with the biggest gains seen in Red Wall constituencies. For working-class families struggling with the cost-of-living crisis, this change would deliver immediate financial relief. It would also address long-standing regional inequalities by ensuring wealthier households contribute a fairer share.
By adopting PPT, Labour could achieve three critical goals:
- Support struggling families by reducing their tax burden.
- Combat inequality by targeting wealthier homeowners.
- Modernise the tax system to reflect today’s housing market.
Why Labour Must Lead
In towns like Hartlepool and across the North, voters feel abandoned by a system that stacks the odds against them. Council Tax reform is not just about numbers; it is about values. Will Labour stand for fairness and equality? Or will it shy away, leaving others to dominate the conversation?
Critics may argue that reforming Council Tax is politically risky, but the greater risk lies in doing nothing. If Labour hesitates, both the Conservatives and Reform UK could seize the initiative, framing themselves as champions of fairness while Labour appears complacent.
The All-Party Parliamentary Group (APPG) on Council Tax Reform, which I proudly support, has worked to expose the system’s deep flaws and build cross-party momentum for change. This is no fringe issue. It resonates with voters across the political spectrum—from Red Wall families to young urban renters and suburban homeowners. Labour must harness this momentum.
The Political and Moral Imperative
Reforming Council Tax is not just smart politics—it is a moral imperative. The current system penalises those who can least afford it while shielding the wealthiest. It entrenches inequality and deepens regional divides.
Labour was founded on principles of fairness, justice, and creating a better deal for ordinary people. Council Tax reform offers a chance to live up to those ideals. By showing courage and conviction, Labour can lead the way on one of the most pressing social justice issues of our time.
Time Is Running Out
Labour must act. Every delay gives Farage and Reform UK more room to exploit grievances and divide voters. If Labour takes bold action, it can neutralise these threats while delivering tangible benefits to millions of working families.
The Red Wall was built on the hopes and aspirations of working-class voters. If Labour is to hold it, we must champion their dreams for a fairer and more equitable society. Reforming Council Tax is not just an opportunity to protect Labour seats; it is a chance to show the nation that they are serious about fixing the systems that hold people back. The time for bold action is now.
By Andrew Dixon OBE, Chairman of Fairer Share