English Mayors to Get Income Tax Share From 2028, Treasury Says

From 2028, England's mayoral strategic authorities will receive a share of income tax receipts for the first time — the centerpiece of a fiscal devolution roadmap unveiled in Wednesday's budget and described by a Treasury minister as a step change and a really big deal.

The shift starts sooner than that headline date suggests. From next year, mayoral authorities will be allocated 20% of business rates revenue collected in their areas. That share could potentially rise to 100% by the end of the decade. A new overnight visitors levy will add another local income stream on top.

What did the Treasury minister say?

Torsten Bell, the Treasury minister, made the case for the reforms in a BBC interview with Evan Davis. Davis challenged him on whether the budget's modest series of "breathing space" measures could truly be said to have ended "40 years of neoliberalism" — a line of questioning that, as The Guardian's editorial notes, is becoming a familiar one.

Bell's answer reached back four decades. "Margaret Thatcher in the 1980s hugely hollowed out local government [and] tried to emasculate our big cities," he said, arguing that the fiscal devolution roadmap reverses that trajectory. He called the roadmap a step change and a really big deal.

The subtext is political. Commentators now regularly cite Manchester mayor Andy Burnham's ringing declaration of long-term intent — his pledge to move beyond neoliberalism — to argue there's an emerging gulf between rhetoric and action on the Labour government's regional agenda. Bell's framing pushed back on that critique by pointing to structural money, not slogans.

Why does replacing grants with tax revenue matter?

The mechanics matter for anyone tracking local authority finances. The roadmap moves mayoral authorities away from dependence on central government grants and toward revenue streams they partially control: income tax receipts, business rates and the visitors levy.

The Guardian's editorial board is measured about what this achieves. Replacing government grants with revenue streams from taxation will not in itself reduce regional inequalities, the paper argues. Wealthier areas collect more business rates and attract more overnight visitors, so tax-based funding can entrench existing gaps unless Westminster designs equalization into the system.

But the editorial sees radical implications elsewhere — in politics rather than arithmetic. Handing directly elected mayors their own tax bases changes who is accountable for local prosperity. The future of what it calls Burnhamism, the assertive municipal politics associated with the Greater Manchester mayor, will play out in municipal England rather than in Westminster debating chambers.

What happens next?

The timeline gives the story a clear arc. The 20% business rates allocation lands next year, giving mayors an early test of whether retained revenue translates into visible local investment. The income tax share follows from 2028, and the potential climb to 100% of business rates by the decade's end would amount to the largest transfer of fiscal power to English city regions since the 1980s hollowing-out Bell described.

The open question, flagged by the Guardian editorial itself, is whether tax devolution narrows regional inequality or merely reshuffles who collects the money. Either way, the debate over whether Labour has ended "40 years of neoliberalism" now has concrete numbers attached to it — 20%, 100%, 2028 — rather than only rhetoric.