Devolution has been through several iterations over the past two decades, from lancing the boil of separatism, to the coalition Government plan to rebalance the economy through the Northern Powerhouse and then the Midlands Engine, to Building Back Better, and finally to its most recognisable guise in Levelling Up, before that label was set aside by the Labour Government in 2024 in its English Devolution White Paper. At heart it has always been the same mission, to decentralise the machinery of government and to give communities across the country the tools to meet their potential. The argument has, by now, largely been won. The mayoral combined authorities in the West Midlands and Greater Manchester sit among the most successful and visible examples of it. As the Government extends the model into communities with very different geographic footprints to the original trailblazers, a real question opens up about whether they are being set up for success, or whether the exercise is simply treading water.

Devolution in Scotland and Wales is now well established, with parliaments that have become settled and familiar parts of the constitution, and each holds real tax powers, most fully in Scotland, which sets its own income tax rates and bands, and in a more limited form in Wales. Northern Ireland sits differently again, since income tax there is not devolved and its main devolved revenue is rates, with a power to set its own corporation tax legislated in 2015 but never brought into effect. The unfinished business is England, where devolution remains younger, thinner and more uneven than the arrangements elsewhere in the Union, and where there is no fiscally empowered regional tier at all, which is the gap this paper takes as its priority. Strengthening the Union runs through England’s regions as well as through Scotland, Wales and Northern Ireland. When mayors and regions carry real weight alongside the devolved nations, the United Kingdom holds together as a partnership of strong parts rather than a centre and its periphery.

To understand that question it helps to recall why the mayoral model emerged at all. When the coalition Government took office in 2010 it inherited one of the most fiscally centralised countries in the developed world. More than ninety per cent of tax revenue in the United Kingdom was, and still is, controlled by central government, with economic weight heavily concentrated in London. That concentration came at the expense of much of the rest of the country, and was felt most sharply in Britain’s second, third and fourth cities, which underperformed their counterparts across other major Western economies, where economic, political and cultural power is far more widely spread. The point worth drawing out is that the UK’s growth problem is in large part a cities problem, since much of the gap with comparable economies comes down to the underperformance of its major cities beyond the capital, which is also where the greatest opportunity lies.

The scale of that gap has been measured with the Centre for Cities estimating that if the big cities outside London closed the shortfall against where their size suggests they should sit, national output would be around £47 billion higher, with Manchester, Birmingham and Glasgow making up about seventy per cent of it. On a wider measure, if all British cities were as productive as those in the Greater South East, the economy would be some £200 billion larger.

The regional inequality underlying this prompted a call for a shift of power away from Westminster and into the hands of local people and institutions, followed by a Local Growth White Paper that set out the foundations of an answer. The Organisation for Economic Co-operation and Development has put the underlying point bluntly, that decentralising power means little unless the money is decentralised with it. Fifteen years on, with a Treasury roadmap for fiscal devolution now in development, that judgement is worth taking seriously.

The lesson of Greater Manchester and the West Midlands. Investment without revenue raising means leadership without full control. A region that depends on London for every pound cannot plan, borrow or take risks on the same terms as the places it competes with.