Andy Burnham’s obsession with Manchester is going to put up all our taxes
Andy Burnham has made one thing unmistakably clear since entering Downing Street: he intends to run Britain differently from Westminster.
The former Greater Manchester mayor has repeatedly pointed to his experience in Manchester as the model for how the rest of England should be governed. His government calls the approach devolution, while Burnham has described the philosophy behind it as “Manchesterism”.
But his attempt to export the Manchester model has triggered an increasingly important argument about taxation: will giving regional leaders more control over locally raised revenue ultimately mean higher taxes for households?
The answer, at least for now, is more complicated than the headline suggests.
Burnham’s government has announced that English mayors will receive a share of income-tax receipts and will be able to retain more locally generated business rates. The government says the objective is to give communities a direct financial incentive to expand their economies, rather than relying so heavily on grants from Whitehall.
The policy represents a significant change in how England’s regions could be financed.
From spring 2027, mayors will be able to retain a greater share of business-rate revenue, while the government has also committed to giving regional mayors a share of income-tax receipts. Further details are due alongside the autumn Budget on October 28.
But there is an important distinction between giving mayors a share of existing tax revenue and giving them the power to impose a new national tax rate.
The government has explicitly said the income-tax rates paid by individuals will not increase as a direct result of the reform. The House of Commons Library likewise notes that the announcement concerns the distribution of existing receipts rather than an immediate increase in income-tax rates.
That means households should not expect their income-tax bill suddenly to rise simply because they live in an area with a mayor.
However, the wider question about future taxation is legitimate.
Burnham has long argued that Britain’s local government system gives regions too little financial autonomy. As mayor of Greater Manchester, he pushed for greater control over transport, housing, economic development and investment.
His experience in Manchester now forms the basis of his national political project.
Reuters described his vision earlier this year as an attempt to move economic decision-making away from London and give regions greater control over infrastructure and taxation. Burnham has argued that Westminster has historically concentrated too much economic power in the capital.
His government therefore wants local leaders to have more responsibility — but greater responsibility also means greater accountability for how money is raised and spent.
That is where the controversy begins.
Critics of Burnham’s programme have warned that fiscal devolution could eventually create a patchwork of different charges across England. The possibility of regional taxation has already become particularly controversial following plans to give councils and regional authorities greater flexibility over visitor levies.
Under the government’s proposed system, councils could introduce an overnight visitor levy. Reports have suggested that a levy equivalent to around 5% of accommodation costs could become a common model, although councils would determine whether and how to use such powers.
The significance of this should not be exaggerated.
A visitor levy would primarily affect people staying in hotels and other accommodation rather than being a direct tax on every household. It would also be a local policy decision, not an automatic nationwide tax increase.
Nevertheless, it demonstrates the direction of travel: more fiscal decisions could be taken closer to the communities affected by them.
And Burnham’s record in Manchester inevitably attracts attention.
Greater Manchester introduced a voluntary £1-per-room-per-night City Visitor Charge, with the proceeds used to support local tourism and related services. Burnham subsequently argued that Manchester needed a more substantial mechanism to benefit from the economic activity generated by visitors.
For critics, that is evidence of a political philosophy in which local government should have more ways of raising money.
Supporters see the same development differently.
They argue that a region should not have to wait for Whitehall to decide how every pound is allocated. If a city-region creates jobs, attracts investment and expands its tax base, allowing more of the resulting revenue to remain locally could create stronger incentives for growth.
The Institute for Government has also described Burnham’s devolution plans as a major change, noting that mayors will gain the ability to retain portions of locally raised income tax and business rates. It argues that the key challenge will be designing effective accountability and ensuring that the new system works across England rather than benefiting only the strongest regions.
That final point is particularly important.
Greater Manchester is not England.
Manchester has developed a powerful combined-authority structure, an elected mayor, transport institutions and years of experience operating under devolved powers. Other parts of England have very different administrative arrangements.
Around half of England’s population was not covered by a mayoral combined authority when the government’s devolution plans were announced.
That creates the risk of uneven outcomes.
A region with a strong economy may generate substantial additional business-rate and income-tax receipts. A poorer region may have a much smaller tax base.
Burnham’s government says this problem will be addressed through equalisation. Ministers have stressed that areas raising less revenue will continue to receive financial support and that the intention is not to abandon poorer communities.
But the precise formula matters enormously.
If regional authorities retain more of what they generate, then differences in economic performance could become more visible in public spending unless the equalisation system compensates sufficiently.
That is why the autumn Budget will be important.
The government has not yet published every detail of the percentage of income tax or business rates that mayors will retain. Until those numbers are known, it is impossible to calculate precisely how the reforms will affect individual regions or whether they will lead to higher overall taxation.
There is another issue: Burnham’s own views on wider tax reform.
The prime minister has previously expressed support for reforming council tax. In July, he said he believed the existing system could be unfair because properties of very different values can face relatively similar council-tax liabilities.
He also said he had been persuaded by arguments for land-value taxation and wider reform of property taxation.
However, Downing Street subsequently rejected reports that the government was preparing to replace council tax and stamp duty with a new annual property levy. Burnham also said that any changes would have to be consistent with Labour’s election manifesto.
So there is currently no basis for saying that Burnham has decided to impose a new nationwide property tax.
What can be said is that he has shown an interest in changing the way local taxation works.
That distinction matters.
Political debate around Burnham’s Manchester agenda can easily turn into a simple claim that “Manchesterism means higher taxes”. The evidence does not establish that.
Indeed, the government’s stated position is almost the opposite: devolve existing revenue rather than simply raise the overall tax burden. Ministers argue that local leaders should benefit financially when their economies grow.
But the concern about future tax competition and regional charges is not entirely theoretical.
Once local authorities have more financial autonomy, they also have more choices. Depending on legislation and the powers ultimately granted to them, different regions could make different decisions about fees, levies and local taxation.
That could make the postcode of a household increasingly relevant to the taxes and charges it faces.
It could also make mayors more politically accountable.
If a regional leader raises a charge, residents will know who made the decision. If the same leader uses the additional revenue to improve transport, housing or public services, voters can judge the results locally.
That is precisely the bargain at the heart of Burnham’s devolution programme.
More power comes with more responsibility.
For Burnham, the challenge is proving that Manchester’s experience can genuinely be transferred to other parts of England.
Manchester’s economic performance has benefited from decades of investment, institutional development and cooperation between local authorities, businesses and central government. Other regions cannot necessarily reproduce those conditions overnight.
The Institute for Government has therefore stressed that the next stage of the process — establishing strategic authorities, designing accountability arrangements and setting out the fiscal framework — will be crucial.
For taxpayers, the question is ultimately straightforward.
Will devolution mean that more money is raised overall, or simply that more of the money already being collected is controlled locally?
At present, the government’s formal plans point towards the second.
Income-tax rates are not being increased as part of the announcement. The system is intended to redistribute control over existing revenue and give regions greater incentives to grow.
But the long-term consequences will depend on the details still to come.
If regional mayors eventually receive wider powers to vary taxes, introduce local charges or reshape council-tax systems, households could indeed experience greater differences depending on where they live.
That would not necessarily mean everyone pays more. Some areas could choose lower charges, while others could prioritise additional spending.
It would mean something different: greater local variation.
And that is perhaps the most important legacy of Burnham’s Manchester experiment.
His political project is not simply about Manchester receiving more power. It is about changing Britain’s assumption that major economic and fiscal decisions must always be made in Westminster.
Whether that produces faster growth, better public services and more responsive government — or simply creates another layer of bureaucracy and taxation — will depend on how the reforms are implemented.
For now, claims that Burnham’s Manchester obsession will automatically put up everyone’s taxes go further than the available evidence.
The real test will come when the government’s promised fiscal roadmap is published and the powers of England’s mayors become clearer.
Then taxpayers will be able to see exactly how much money is being devolved, who controls it, what new charges can be imposed, and whether the system changes the total tax burden.
Until then, the debate is less about an immediate nationwide tax rise and more about a fundamental question of British government: should the money raised in a region be controlled in Westminster, or should more of it stay where it was generated?
Burnham has clearly chosen the second option.
The argument over what that choice ultimately costs — and who pays — has only just begun.
