Council tax in the UK will rise by £9.4 billion, Labour have confirmed. The rise, which represents a 26% increase by 2029, comes as ministers expect council tax rates to continue to rise at the maximum rate allowed.

Earlier this year, the Government said that local authorities would see their spending power increased by 2.6% but refused to confirm how much of this would be generated by tax increases. A Freedom of Information request produced by the Conservatives shows that two-thirds of the increase to “spending power” comes from tax increases, which have already been hiked by 5% in some parts of the country. Under the council tax rules, councils are allowed to increase rates by 5% a year, even if inflation in the wider economy and wage increases are lower.

The Mayor of Greter Manchester Andy Burnham has this week urged Sir Keir Starmer to reform the council tax system, highlighting the need to increase levies on expensive properties in London and the South East.

He told the Telegraph that leaving the council tax system as it is would not be “an acceptable response, when you live here in the real world, where councils are now really struggling”.

He added: “There are people in homes in London that are worth double-figure millions paying less council tax than people here. It’s just not justifiable.”

Under the current system, a house or flat is placed in a band depending on an assessment of its value in 1991. The highest band, band H starts at houses with a 1991 value of £320,001 or more, with no adjustment made to account for the increase in house prices in the three decades since.

The council tax hike is one of many expected in the coming months and years, with Chancellor Rachel Reeves widely expected to introduce a raft of measures in her Autumn budget later this year.

Reeves is under pressure to fill a black hole in the nation’s finances estimated to be around £30 billion. and is limited in the action she can take by her “iron-clad” fiscal rules, which limit her increasing day-to-day government spending and compel her to ensure that net financial debt is on a sustainable downward path.

Sir James Cleverly, the Shadow Housing Secretary, has accused Labour of being “caught red-handed hiking council tax on middle England”.

He told the Telegraph: “Labour are budgeting for a massive £9bn hike in council taxes, misleading Parliament on the actual grant funding that councils are getting.

“I fear that this is the tip of the iceberg of the soaring tax bills that family homes now face, with Starmer’s advisers drawing up plans for further rises.

“The Conservatives are the only party campaigning against these new taxes on your home.”