Reeves plans to give regional leaders a share of national tax revenues

"It is no coincidence that the UK is the most politically centralised of advanced democracies, and one of the most geographically unequal, Reeves said. She said Treasury officials would bring forward a road map at the autumn budget to allow regional leaders to receive a share of national taxes – starting with income tax."

"She called the new approach a permanent transfer of power and resources, not another exercise in local ambition frustrated by central government control. Local authorities across the UK have faced a funding squeeze in recent years, with several big councils forced into bankruptcy."

"She said recent events, including the Middle East conflict, had confirmed that, as she said in her first Mais lecture two years ago, globalisation, as we once knew it, is dead. She conceded that the Iran war is likely to put upward pressure on inflation in the coming months."

Chancellor Rachel Reeves has unveiled a comprehensive plan to decentralize economic power in England by allowing regional leaders to share national tax revenues, beginning with income tax. She emphasized that the UK's extreme political centralization and geographic inequality are interconnected problems requiring structural reform. The Treasury will present a detailed roadmap at the autumn budget. Reeves announced a £2.3 billion City Investment Fund for city region mayors' long-term investments and confirmed they can retain future business rates revenue. She framed this as a permanent transfer of power and resources, contrasting it with previous ineffective local initiatives. The announcement comes amid global economic uncertainty from Middle East tensions, though Reeves maintains the UK's stronger position compared to 2022.

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