Full Breakdown
England’s Mayors to Receive a Share of Income Tax and Business Rates
7/31/2026, 7:49:24 AM
New Devolution Plan: Mayors to Keep Local Tax Revenue
The government plans to announce on July 30 that Prime Minister Andy Burnham will allow English regional mayors to retain a share of income-tax revenue and business-rate collections for the first time.
Fiscal Context and Projected Funding Shifts
- The OECD reports that only 5.8 % of UK national taxes are collected locally, the lowest share among the G7, compared with 20.4 % in France, 36 % in Japan and 45.7 % in the United States.
- A Re:State analysis estimates that if mayors receive 2.5 % of the basic-rate income tax, London could obtain £2.3 billion in 2026-27, while Hull and East Yorkshire would receive about £135 million.
- The plan will also give mayors control of business-rate income amounting to “tens of millions of pounds” by April 2027, replacing existing central-government grants rather than adding new money.
- Since 2024, only Greater Manchester and the West Midlands have been able to keep all business-rate revenue, amounting to £100 million in 2024-25 for Greater Manchester.
Official Statements & Responses
His office highlighted the creation of “Number 10 North,” a Manchester outpost to coordinate devolution and deliver jobs and growth. Chancellor John Healey is expected to detail the exact share of taxes in the autumn budget, and the government says it will consult devolved administrations in Scotland, Wales and Northern Ireland about similar arrangements.
Criticism and Concerns
BBC-cited critics argue the proposals lack detail and could leave economically weaker areas with reduced funding. The Guardian notes policy experts warn the shift may produce a “two-tier England,” potentially marginalising the roughly 25 % of the population that currently lacks a mayoral authority. Experts also point out technical challenges, such as the difficulty for mayors to issue tax rebates without knowing individual taxpayers’ contributions.
Verbatim Quotes
- “It’s really important because it gets us out of the death grip of the Treasury and gives us that long-term certainty around income.” — Oliver Coppard, the Labour mayor of South Yorkshire
