Burnham’s devolution plan would let mayors share income tax revenue

Andy Burnham planned to hand regional mayors a share of income tax revenue to spend on their cities, a move that would push part of the tax base away from Westminster. The wider devolution package also points to more tax-raising power for mayors and, in some versions, greater borrowing freedom, turning the debate into a test of whether city regions would gain real control over spending or simply receive a new label on central funding.

The politics around the plan hardened quickly. Keir Starmer compared Burnham's economic ideas with Liz Truss's policies, a line that underlined concern in Westminster that the proposals were not fully costed or detailed. Burnham later said there was "some room" for movement on tax, including the idea of increasing business rates on warehouses to fund cuts for pubs and some high street businesses.

The biggest unanswered question is how the money would actually flow. The House of Commons Library has published a briefing on what taxes regional mayors can raise and whether that could change, while parliamentary evidence on the English Devolution and Community Empowerment Bill refers to allowing cities to keep a share of income tax they generate, with mayors agreeing funding settlements with boroughs. That leaves unresolved who decides the split, how one borough's loss would be covered, and whether a mayor would answer to voters for the spending or to Whitehall for the settlement.

The Burnham plan also lands in the middle of a wider shift in Labour thinking. Rachel Reeves moved in a similar direction in March 2026, with proposals to give England's regional leaders a share of national tax revenues, and the government announced consultation in 2025 on a new mayoral power to create visitor levies on overnight stays in England. Taken together, those moves suggest a broader effort to spread fiscal responsibility beyond London, but they also sharpen the distributional stakes.

The real dividing line is not between central government and local pride. It is between genuine tax autonomy and a rearrangement of grants, and that difference will determine which city regions gain cash, which councils lose leverage, and how much control the Treasury still keeps over local spending.