English mayors are to be handed a share of the income tax raised in their areas from 2028. They aren't to be handed the power to change it by a single penny, and that's the difference between devolving a tax and rebranding a grant.
Crossbencher · 03 August 2026
Britain is the most fiscally centralised country in the G7, and the government has just proposed to fix it without touching the part that matters. From April 2028 the mayors of England's city regions are to receive a share of the income tax collected in their areas, and from April 2027 a slice of the business rates. The rates themselves don't move. The basic rate will be 20 per cent on income between £12,571 and £50,270 in Greater Manchester for precisely the reason it's in Surrey, which is that the Treasury says so.
The problem being addressed is real and the number is embarrassing. According to OECD figures, 5.8 per cent of taxes in the United Kingdom are collected at local level. That's the lowest share in the G7. France manages 20.4 per cent, Japan 36, the United States 45.7. An English mayor today runs transport, skills and housing on money sent down from Whitehall in annual instalments, with conditions attached, and spends a good part of the year lobbying for the next one. Nobody defends this arrangement. It survives because the people who would have to end it are the people it suits.
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