There are moments in economic policy when Westminster has to decide whether it genuinely trusts the regions—or whether it simply wants to manage them. In her recent Mais Lecture, Rachel Reeves signalled that the government may finally be ready to move from rhetoric to reality by granting regional mayors greater fiscal and tax-raising powers.
If delivered properly, this would be one of the most significant steps forward for the devolution agenda in a generation—and it’s long overdue.
For too long, the UK has operated one of the most centralised economic models in the developed world. Decisions about local growth, infrastructure, housing, and skills are still too often made in Whitehall by people who, frankly, don’t have to live with the consequences. The result? Slow delivery, missed opportunities, and a persistent imbalance between London and the rest of the country.
Giving metro mayors genuine fiscal autonomy changes the game.
Take leaders such as Tracey Brabin, Richard Parker, Andy Burnham and Steve Rotheram. These are individuals with a direct democratic mandate, strong business engagement, and a clear understanding of their local economies. Yet, despite that, their ability to act is often constrained by limited financial levers and reliance on central government funding pots—usually tied up with conditions and bureaucracy.
Allowing mayors to retain and raise revenue locally, whether through elements of business rates, or targeted local taxes, would enable them to invest with confidence and plan for the long term. It would shift the focus from short-term bidding rounds to long-term economic strategy.
And that’s the real prize here: certainty.
Businesses don’t invest based on slogans. They invest where there is clarity, consistency, and leadership. A devolved fiscal model gives city regions the tools to create that environment—aligning infrastructure investment with housing delivery, skills with employer demand, and regeneration with private sector opportunity.
It also strengthens accountability. If mayors have the power to raise and spend money locally, they can no longer hide behind Whitehall, and nor should they. Voters will be able to judge directly whether local leaders are delivering growth, improving connectivity, and supporting business.
Of course, this shift needs to be done properly. Fiscal devolution must come with clear frameworks, transparency, and safeguards to ensure fairness between regions. But let’s not pretend that the current system is delivering balance, because it isn’t.
At Downtown in Business, we’ve long argued that the cities and regions outside London are not short of ambition, but they are short of power. Unlock that power, and you unlock growth.
The reality is this: the UK cannot achieve its national economic ambitions without stronger regional economies. And stronger regional economies require leaders who are empowered, not managed.
Rachel Reeves’ comments suggest the government is beginning to understand that.
Now it needs to follow through. A genuine package of fiscal devolved powers from Westminster to the regions, Not from local authorities to Combined Authorities, or from private sector initiatives such as Accommodation BIDs to unnecessary Tourist taxes. Serious money that is currently controlled by the Treasury moving to mayors.
Because if we’re serious about levelling up—about growth, productivity, and opportunity—then trusting our city regions isn’t just an option.
It’s the only way forward.
