PM Burnham announces mayors can retain income tax and business rates
Prime Minister Andy Burnham announced that mayors will be allowed to keep a share of income tax and business rates revenues, as part of devolution plans.
The Full Story
A plain summary built from the channels that reported this story.
Prime Minister Andy Burnham has announced that English mayors will be allowed to keep a share of income tax and business rates collected in their areas, in what he called the biggest shift of power out of Whitehall and Westminster into all places across the UK. The plan, part of his long-standing devolution agenda, is intended to give local leaders more control over transport, housing, jobs, and skills, and to drive economic growth in every postcode.
Speaking at a community centre in Sheffield alongside Chancellor John Healey, Burnham said the move would free up areas to do more for themselves, grow their economies, and keep some of the proceeds. Healey confirmed that further details, including the exact proportion of tax revenues that mayors will retain, will be set out in his first budget on 28 October.
The announcement has been broadly welcomed by regional leaders, but it has also drawn criticism. Conservative mayor of Tees Valley, Ben Houchen, said the plan could be seen as a tax grab from Westminster and argued that proper devolution should allow him to reduce people's taxes if he chooses. The government, however, indicated it would prefer mayors to reinvest the money back into local economies rather than hand it back to taxpayers.
Concerns have also been raised about areas that do not have a mayor. A Labour MP in Cornwall warned that such areas risk being locked out of the new opportunities. Only about half of England's population is currently represented by a mayor, and the government acknowledged it still has work to do to extend mayoral coverage across the country.
Another key question is how the system will avoid widening inequalities. Critics point out that wealthier regions with strong economies could pull further ahead if they keep more of their tax revenues, while poorer areas may struggle. The government says it will include redistributive measures to ensure all areas benefit, but no formula has been set out yet.
There is also no new money attached to the plan. Any tax revenue retained by mayors will replace existing central government grants, not supplement them. Local councils face a projected multi-billion pound funding gap over the next three years, and the announcement does not address that directly.
Despite the unanswered questions, the principle of fiscal devolution has support from across the political spectrum. Labour mayor of the West of England, Helen Godwin, said the new powers would give mayors a stronger argument when making the case for their areas. Ben Houchen, while critical of the details, agreed that devolution is a good thing and that Whitehall does not have all the answers.
The prime minister has described the plan as the biggest rebalancing of power the country has ever seen, but with many specifics still to come, the devil remains in the detail.
On screen
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Key Claims
Claims reported during this story's coverage, mapped by channel. Ordered by how many channels carried each claim.
| Claim | BBC One | BBC Two | Channel 4 | ITV | Sky News |
|---|---|---|---|---|---|
| Prime Minister Burnham announced that mayors will be allowed to retain a share of income tax and business rates revenues. | · | ||||
| The government says more details will be provided alongside the autumn budget. | · | · | |||
| There is a risk that wealthier areas could pull further ahead under fiscal devolution. | · | · | |||
| Conservative mayor Ben Houchen wants to give cash back to taxpayers rather than reinvest it. | · | · | · | ||
| The government has not provided exact details of how much cash will be devolved to mayors. | · | · | · | ||
| Ben Houchen said the plan could be seen as a tax grab from Westminster. | · | · | · | · | |
| Burnham is making good on his promise to devolve power. | · | · | · | · | |
| Burnham's first two announcements as PM were a nationwide bus fare cap and a decision on business rates for pubs and clubs, which are centralised policies. | · | · | · | · | |
| No new money is being provided; tax revenue retained will replace central government grants. | · | · | · | · | |
| Only half of the English population is currently represented by a mayor. | · | · | · | · | |
| The policy is part of a pattern of transferring power from Westminster. | · | · | · | · | |
| The UK is described as one of the most centralised developed countries, leading to uneven economic geography. | · | · | · | · |
Channel Perspectives
What each channel focused on, with key quotes.
The programme focused on the debate around centralisation versus devolution, with a panel discussion exploring the risks of rich areas pulling ahead and the need for an equalisation mechanism. The tone was analytical and slightly sceptical, highlighting that the policy is 'extremely details-light'.
- “the biggest rebalancing of our power our country has ever seen”
- “we are one of the most centralized countries developed countries european countries”
- “it's an extremely details-light policy”
Sky News emphasised the political challenges, noting that only half of England's population has a mayor and that the plan could be seen as a tax grab. It also highlighted the reaction from Conservative mayor Ben Houchen and concerns from a Cornish Labour MP about areas without mayors being left behind.
- “He's not the first Prime Minister to say that he wants to devolve power out of Westminster”
- “it could be seen as a tax grab from Westminster”
- “only half of the English population is represented by a mayor”
ITV Lunchtime News presented the story as part of Burnham's drive to give more power to local leaders, with a focus on the lack of detail and criticism from a Labour MP in Cornwall. The tone was straightforward and factual, with a brief mention of the budget date.
- “The idea is you free places up to do more for themselves and grow their economy and keep some of the proceeds.”
- “We don't have exact details of what proportion of income tax might be given to local leaders.”
- “There has been some criticism of these plans from one Labour MP actually in Cornwall who says areas without mayors might miss out on extra powers and funding.”
The BBC One West report focused on the prime minister's visit to Sheffield and the reaction from Conservative mayor Ben Houchen, who wants to use the money to reduce taxes. It also raised the question of areas without mayors, using Cornwall as an example. The tone was balanced, with a clear explanation of the policy and its uncertainties.
- “the biggest shift of power out of Whitehall and Westminster Into all places across the UK”
- “If he's going to give us the real Responsibility and devolve it out of Whitehall. That means that I might decide to reduce people's taxes”
- “The Prime Minister said today the plans weren't about allowing mayors to become mini chancellors”
ITV News West Country took a local angle, focusing on the West of England mayor Helen Godwin and the potential impact on the region. It highlighted the risk that wealthy cities like Bristol could benefit disproportionately and raised the question of what happens to areas without a mayor, such as Dorset and Wiltshire.
- “This is not about depriving anywhere. It's freeing up places to go further and to go faster.”
- “Andy Burnham says regional mayors will get a share of local income tax and keep more business rates to invest in housing, transport and skills.”
- “Critics so far have said that this might mean that cities and lucrative cities, some like Bristol with strong and thriving economies, might receive an unfair share of the money”
Channel 4 News provided a more analytical and critical take, emphasising the lack of detail and the absence of new money. It included interviews with both a Labour and a Conservative mayor, and highlighted the risk that the policy could widen regional inequalities. The tone was measured but pointed out that the 'devil is in the detail'.
- “Devolution, it's long been Andy Burnham's plan to rewire Britain”
- “the devil is in the detail and the detail is still a bit thin”
- “no new money, nothing on how councils might plug that projected multi-billion pound funding gap”
Broadcast Timeline
News broadcasts tracked for this story, in time order.