Burnham tables blueprint to break up England's centralised state
A cabinet paper from Greater Manchester's mayor proposes mayoral tax powers and a German-style equalisation duty, aiming to end four decades of regional economic neglect.
Andy Burnham published a cabinet paper on Friday laying out a structural overhaul of English governance, centred on elected mayors as the primary regional economic actors. The plan, confirmed in part by Downing Street, would let mayors retain income-tax and business-rate revenues, with the exact share to be set in the forthcoming budget and spending review.
The proposal also envisions pan-regional agencies spanning mayoral boundaries, covering transport, energy, investment and industrial policy. Regions that currently lack a mayor would be offered the choice of electing one or accepting a more limited set of powers.
A third pillar, which Burnham floated before taking office, would impose a statutory duty on English regions to pursue equivalent living conditions nationwide, explicitly modelled on Germany's Basic Law. The mechanism mirrors the German equalisation system: regions that grow their tax base keep a share of the upside, while Westminster continues redistributing resources so poorer areas can fund services and invest.
Without such a mechanism, the fiscal arithmetic tilts sharply toward the capital. One thinktank calculated that if mayors received 2.5 per cent of the 20p basic rate of income tax, London would collect £2.3bn in 2026-27 while Hull and East Yorkshire would receive £135m.
A gap wider than Germany's
The urgency is underlined by a new Harvard Kennedy School and King's College London paper, co-authored by former Labour minister Ed Balls, which argues that Britain's weak productivity is rooted in persistent regional divides. The gap between south-east England and the rest of the country, the authors find, is now wider than the divide between east and west Germany more than three decades after reunification.
Burnham's critique reaches back further. He argues that only post-communist Europe deindustrialised as fast as Yorkshire and the Midlands did in the 1980s, and that centralisation stripped those regions of the powers, finance and institutions needed to absorb the shock or build replacement economies.
Resistance from the right
Not all mayors back the plan's logic. Ben Houchen, the Conservative mayor of Tees Valley, has proposed using devolved income-tax revenues to fund local tax rebates. Critics warn that approach would turn regional elections into competitive tax-cutting auctions, draining poorer areas of the capital needed to rebuild transport links, skills programmes and industrial capacity.
Completing the map
England's devolution geography remains patchy, but the timetable is set. New mayoral authorities are scheduled for Cumbria and for Cheshire and Warrington in 2027, followed by southern and eastern regions in 2028. Remaining areas will choose between mayoral strategic authorities with stronger powers and non-mayoral "foundation" bodies with more limited controls.
The political alignment that has long been missing may now exist. As the Harvard-King's paper notes, Britain has never simultaneously had both Downing Street and the Treasury committed to regional growth. With a Labour government in place and Burnham's blueprint on the table, the country is about to test whether the centre can finally pull in the same direction as the regions.
