Andy Burnham has pledged to shift power from Westminster to England's regions, with a key proposal being to let regional mayors keep a share of income tax raised locally to fund economic development. The plan, first floated by Rachel Reeves, is widely welcomed by economists as a way to tackle Britain's deep regional inequalities, since the UK remains one of the most fiscally centralised developed economies, but implementing it will be complex and slow, testing a prime minister keen to show quick results.

The Centre for Cities estimates only around 5% of UK tax revenue currently stays with mayors and councils, compared with 14% in France and 22% in Japan, while the Institute for Fiscal Studies reckons 6–9% of local income tax would be enough to replace existing central grants to mayoral authorities. Risks include wealthier, fast-growing areas such as London and Greater Manchester pulling further ahead of slower regions like the West Midlands and South Yorkshire, potentially entrenching inequality rather than reducing it. The income tax plan would not take full effect until 2028, by which point dozens of new mayoralties, including in Essex, Stoke-on-Trent and Warrington, are also meant to be established, and the OECD has warned that years of austerity have left local government ill-prepared for such an expanded role.