Andy Burnham's radical plan to unbundle England's centralized state is a pivotal step toward regional economic revival. The devolution programme aims to shift power from Westminster to mayors, addressing decades of over-centralisation that left regions vulnerable to deindustrialisation.
Why England's Centralisation Hurts Regional Growth
England is among the rich world's most centralised countries, a fact that underpins Burnham's critique of the past 40 years. Only post-communist Europe deindustrialised as rapidly as Yorkshire and the Midlands did in the 1980s. Centralisation did not close every factory or pit, but left regions without the powers, finance, or institutions to cushion the shock or build a resilient replacement economy.
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Three Pillars of the Unbundling Plan
Burnham's proposal has three facets. The first is a cabinet paper released on Friday, a blueprint for a decentralised state organised around mayors as key regional economic actors. Pan-regional agencies could emerge for transport, energy, investment, and industrial systems that cross mayoral boundaries. Regions without mayors can opt for one or limit themselves to weaker powers.
The second pillar, confirmed by No 10, allows mayors to keep income-tax and business-rate revenues, with the forthcoming budget deciding on amounts. The third pillar, modelled on Germany's Basic Law, requires English regions to pursue equivalent living conditions nationwide, ensuring redistribution so poorer places can provide comparable services and meaningful investment capacity.
Comparing Devolution Models: England vs Germany
| Aspect | England (Proposed) | Germany (Existing) |
|---|---|---|
| Tax Retention | Mayors keep income-tax and business-rate revenues | States (Länder) have significant tax autonomy |
| Equalisation | National redistribution to poorer regions | Constitutional duty for equivalent living conditions |
| Regional Governance | Mayors as key economic actors | State parliaments with legislative powers |
| Central Control | Reduced but still significant | Federal system with clear division |
Potential Pitfalls: The London Disparity
Without equalisation, disparities would widen. One thinktank noted that if mayors received 2.5% of the 20p basic rate of income tax, London would get £2.3bn in 2026-27 while Hull and East Yorkshire would get only £135m. This stark contrast highlights the need for a robust redistribution mechanism.
Key Takeaways from Burnham's Plan
- Devolution around mayors as regional economic drivers
- Retention of income-tax and business-rate revenues
- Pan-regional agencies for cross-boundary infrastructure
- Constitutional equalisation duty to prevent regional divergence
- Optional mayoral powers for regions without existing mayors
FAQ
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