Andy Burnham to give regional mayors share of income tax
Prime Minister Andy Burnham unveils landmark plans to transfer financial power to local leaders by giving English regional mayors a share of income tax and business rates.
Stock photo for illustration only, not from the actual event
- English regional mayors will receive a share of income tax revenue for the first time.
- Mayors will retain business rates from April 2027 and income tax portions from April 2028.
- The UK currently has the lowest share of locally collected taxes in the G7 at 5.8%.
- Critics argue the plan lacks detail and risks leaving economically weaker areas underfunded.
Prime Minister Andy Burnham is set to grant all metro mayors in England a share of income tax revenue for the first time, marking a major step in shifting political and financial power away from Westminster and toward local leadership.
Alongside income tax, Burnham will permit strategic authority mayors in England to retain a portion of business rates collected locally while gaining broader oversight over vital public services including housing, transport, and skills training.
Stock photo for illustration only, not from the actual event
By international standards, tax-raising powers in the UK remain heavily centralised. Data from the OECD shows that the UK collects only 5.8% of national taxes at the local level, trailing far behind major economies like France at 20.4%, Japan at 36%, and the US at 45.7%.
Fiscal decentralisation represents a significant structural shift for the UK, moving local authorities away from traditional Whitehall grant dependency toward self-sustaining revenues tied to economic growth. While thriving metro areas stand to benefit from expanding their tax bases, officials must carefully calibrate equalisation mechanisms to protect regions with smaller economies from funding shortfalls.
Under the proposed timeline, English metro mayors are projected to retain business rate revenues starting in April 2027, followed by income tax allocations in April 2028. Standard income tax rates, such as the 20% basic rate applied to earnings between £12,571 and £50,270, will remain unchanged by the reform.
"Under our plans, more of the taxes raised in a community will stay in that community."
Andy Burnham
Critics have pushed back against the initiative, with Conservative shadow chancellor Sir Mel Stride claiming the proposal lacks essential details and introduces no genuinely new funding unless accompanied by borrowing or cuts elsewhere.
Source: BBC Politics
Found something wrong in this article? Report an issue with this article
Comments
Leave a Comment