"They are of course unrepresentative. But this is not their only disadvantage. More importantly, they cannot do anything. They can only harass and complain."

Council tax is so regressive locally that we can cut bills for most people while not cutting local gov budgets simply by making it flat or slightly progressive locally If we devolve it this way, 2/3 of households everywhere - from Wigan to Westminster - get a council tax cut.

Centralising council tax is a bad idea. So what can we do? The key lies in understanding that the unfairness with council tax is not national but local. Less expensive houses face higher tax rates everywhere because central Government anchors bills nationally around Band D.

3. Centralising council tax will make it much harder for Burnham to advance devolution. If we want local autonomy we need local scrutiny. There's no way we're getting this from Mr and Mrs Joe Public unless they get a tax bill for which their mayor is responsible

In turn, if local government becomes even more reliant on grant then its growth incentives will weaken even further A notionally pro growth tax reform would end up doing the opposite

2. The flip side of higher bills in the South from centralisation of council tax would be a funding famine in the North. Even if we adjusted grants to compensate losing places, the cognitive problem of how we decide future distribution of grant would be incredibly challenging

1. Replacing council tax's cash terms with a % tax is a good idea that makes the revenue base more buoyant. But a single national tax rate is a terrible idea. Bills would decline in the North, but explode in the South. This is the same mistake Thatcher made with the poll tax:

There are lots of proposals to replace council tax and stamp duty with a single national tax, whether a property tax or a Land Value Tax. These all face 3 big problems: - The geography of bills - How councils are funded - Blockages to further devolution

We produced research last month on how to make income tax sharing work for the mayors + how to solve challenges with equalisation (i.e. how to deal with problem for fiscal devolution that some places can raise more cash than others). Check it out here: bsky.app/profile/cent...

Our briefing on fiscal devolution picked up in today's Observer - if mayors were responsible for their own budgets, they'd have much stronger incentives to grow their economy and taxbase:

Fiscal devolution is tricky, but is possible, and has the potential to increase growth, address our geographic divides, and share political power back across England. Whoever the next PM is, delivering ambitiously on the commitment to fiscal devolution is vital for the country.

Fiscal devo to councils would imply - -Shifting business rates retention system to income/corpo tax -Fully devolving business rates -Equalising between metro mayors, who then equalise locally This is how Switzerland and Poland have successfully done fiscal devolution

5. Eventually we should fiscally devolve to councils Councils control planning permission and provide most services. Fiscal devo could go further than mayors to "vertical tax sharing' of income tax and corporation tax with councils too. This does present Qs for equalisation

4. We only need to devolve 1% of national income tax revenues Mayors currently have small budgets, so we don't need to devolve much at all. Replacing their grants with a share of income and corporation tax wouldn't cost anything and would improve incentives to grow:

If we share income tax and corporation tax with local gov, it becomes MUCH easier to give full fat devolution over business rates This is because BR currently funds the equalisation system for councils - so a broader base gives far more options for autonomy and redistribution.

Corporation tax should also be shared with mayors. It provides a v strong growth incentive as it gives a focus on the business base, especially exporters And it complements income tax as it is workplace based. This map of Manchester shows estimated relative revenues by borough

3. Income and corporation tax should be shared, plus more autonomy over business rates. Income tax is a strong candidate for fiscal devolution as it is buoyant (revenues rise as economy expands) easy to collect, and stable. Many other rich countries use it at the local level

2. Let places keep a share of local tax revenues, not a slice of national tax revenues. Might sound similar but conceptually distinct. Keeping 10% of everything your place generates means local performance determines resource. Keeping 10% of national revenue means it doesn't.

1. Focus fiscal devolution on metro mayors first, and expand to councils later Two reasons: 1) Mayors are responsible for local growth in their area, and exist at scale of the local economy 2) Inequality between metro mayors is much smaller - so 'equalisation' is much easier

So how do we do fiscal devolution? Local finance reform is tricky, but the fiscal devolution roadmap seems like it will set out an iterative process. To make progress it will have to first have a clear answer to five key questions:

Why would we think fiscal devo increases growth? 1) It gives a growth incentive to local gov 2) It allows local gov to borrow against higher receipts for investment 3) It ensures local growth flows into better local living standards 4) It increases local gov accountability

The reason we are so centralised is we are spatially unequal - central government directs funding to councils with weaker taxbases. But two caveats 1) Most of that inequality is driven by London 2) Nearly all countries with more fiscal devo have much less spatial inequality

Our local government also relies by far the most in the G7 on grants from central government. This means that councils and mayors cannot finance themselves by growing their local economy and taxbase - they are disconnected from their local economy.

The context for this is we are extremely centralised as a country. Only 5% of all tax revenue flows to local government in the UK, by far the lowest in the G7.

The Chancellor announced in the 2026 Mais Lecture that the Government would set out a 'fiscal devolution roadmap' that would advance tax sharing powers to the metro mayors - i.e. keeping some locally generated revenues w/o varying bills - including income tax

It doesn't, he is setting that out as one of the big risks of the current strategy due to how we are currently locked in to high energy prices. Gas prices in the UK are high yes, but they're much higher than eg US LNG which hasn't seen the same trend

War Without Mercy is really good. Check out Embracing Defeat and Akira Iriye's Power and Culture too

Really good post here. Another way of putting this - if the environmentalists are right that "global gas prices are why British energy prices are high" that points to coal being the missing part of the British energy mix

This has really been driven by the big cities - London has become far less deprived since 2010, and Manchester has seen the largest decrease in inner city deprivation of any city in the UK