Auto Amazon Links: No products found.
Prime Minister Andy Burnham has announced a significant shift in the distribution of tax revenue, proposing to give all English city region mayors a share of income tax for the first time. This move is part of Burnham’s wider agenda to decentralize power from Westminster and empower local leaders. In addition to income tax revenue, mayors of strategic English authorities will gain the ability to retain a portion of business rates collected in their regions, along with increased control over key public services such as housing, transport, and skills development.
Specific details regarding the exact share of taxes that will be allocated to mayors have yet to be finalized, with further clarifications expected during Chancellor John Healey’s upcoming autumn budget. Critics have expressed concerns over the lack of detail and potential risks that regions with weaker economies might receive less funding. Nevertheless, Burnham defended the plans as a fulfillment of his commitment to “bring power home” to local communities, stating, “Under our plans, more of the taxes raised in a community will stay in that community.”
Currently, the UK’s tax system is highly centralized, with only 5.8% of national taxes collected locally—the lowest rate among G7 countries, according to an OECD report. This proportion lags behind the systems in nations like France, Japan, and the United States, where local tax shares range from about 20% to nearly 46%. At present, English metro mayors primarily rely on government grants for their funding. During his tenure as Greater Manchester mayor, Burnham advocated for increased control over local tax revenue instead of dependence on central funding. The UK government had already been exploring sharing national tax revenue with metro mayors before Burnham assumed the role of prime minister early this month, but he has since committed to ushering in the “biggest rebalancing of power our country has ever seen.”
The prime minister’s vision aims for local areas to shift away from reliance on Whitehall grants, instead basing funding on local economic growth. From April 2027, metro mayors in England are expected to start retaining some revenue from business rates, followed by the allocation of a portion of income tax beginning in April 2028. Although income tax rates themselves will remain unchanged, the share assigned to each mayor may vary, with officials still working out the finer points. One think tank, Re:State, has suggested that mayors could receive 2.5p of every basic rate pound collected locally. However, opposition voices argue the proposals lack financial clarity. Conservative shadow chancellor Sir Mel Stride critiqued the announcement as “very short on the detail,” warning that weaker economies could suffer under the new system. Additionally, Reform UK spokesman Zia Yusuf called for even greater local control, particularly over issues such as the housing of illegal migrants, emphasizing Burnham’s stated commitment to local voices being truly heard
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found.