Rachel Reeves Announces Plans for Local Control Over Income Tax Revenue
In Brief
The proposed measures aim to increase regional economic autonomy and address rising insolvency rates in England and Wales.
Key Facts
- Rachel Reeves delivered the Mais lecture at Bayes Business School in London.
- Local leaders will be given powers to choose how some income tax is spent, according to Reeves.
- There were 11,609 individual insolvencies registered in England and Wales in February.
- Treasury officials have been asked to create a roadmap for these measures to be published at the Budget.
- The February insolvency figure was 18% higher than in February 2025 and 6% higher than in January 2026.
What Happened
Chancellor Rachel Reeves announced plans to grant mayors and local leaders authority over portions of income tax revenue, alongside reporting a rise in insolvencies in England and Wales.
Why It Matters
The initiative is intended to empower regional governments to address local economic challenges, potentially improving growth and resilience amid increasing insolvency rates.
What's Next
Treasury officials are preparing a detailed roadmap for implementation, expected to be released at the upcoming Budget. Further details on regional tax allocation may follow.
Sources
- The Guardian — Rachel Reeves warns of ‘anxious times’, and warns ‘globalisation as we once knew it is dead’ – business live(1h ago)
- The Independent — Rachel Reeves sets out plans to hand mayors a share of tax revenue(1h ago)
- The Independent — Local leaders to be given powers to choose how some income tax is spent, Reeves announces(46m ago)