The United Kingdom is exploring plans to grant greater fiscal powers to regional authorities, including partial control over taxes, as part of efforts to stimulate economic growth and reduce regional inequality.
Speaking in London’s financial district on Tuesday, Finance Minister Rachel Reeves said the government is developing a roadmap for fiscal devolution, which will be unveiled in this year’s national budget.
“This will set out plans to give regional leaders control of a share of some national taxes,” Reeves stated, adding that proposals could include elements of income tax alongside other revenue streams.
The initiative is aimed at addressing longstanding economic imbalances across the United Kingdom, where regions outside London have struggled with weaker growth and productivity.
Currently, most taxation and public spending decisions are centralized in London, unlike in countries such as Germany and France, where greater regional autonomy has helped reduce disparities between cities.
According to official data, London’s share of the UK economy has grown by more than three percentage points since 2000, now accounting for around 24% of total output—often at the expense of other regions.
The proposed reforms could mark a significant shift in Britain’s fiscal structure by allowing regional mayors to retain and manage a portion of tax revenues currently controlled by the Treasury. However, the government has yet to clarify the full scope of these changes.
Officials say the move is part of a broader strategy to drive balanced economic development and empower local leadership across the country.
If implemented, the plan could reshape how public finances are managed in the UK, bringing it closer in line with more decentralized European economic models.