LCCI Comments on Prime Minister's Income Tax Sharing Pledge

Friday 31 July 2026

Karim Fatehi OBE, CEO of the London Chamber of Commerce and Industry, commented:

“We welcome the Prime Minister’s pledge to give all mayors of city regions in England a share of income tax revenue but are deeply concerned by speculation that London will receive a smaller proportion of its taxpayers’ money than other areas.

The Prime Minister's move to incentivise growth by letting local areas retain some of the tax revenue generated in their own postcode is a positive step. Giving mayors of city regions in England a share of income tax revenue and business rates to invest in infrastructure, housing and local services could be transformative for the country's economy.

London and the South-East pay 45% of the UK's income tax bill and London businesses pay 30% of England's business rates. It is essential that the share London receives fairly reflects the tax receipts it generates, allowing London to invest in the infrastructure that a competitive and modern capital needs. Without this, London will not be able to attract the international investment which benefits jobs and growth across the whole country.

A new funding formula which treats London differently to the rest of the country would create an inherent unfairness in the new devolution agenda for London taxpayers and businesses. This would undermine the very thing the Prime Minister has set out to achieve, by disincentivising growth in a critical part of the country.

The attractiveness of any country's capital city is a national issue, not a regional one. There is no country-wide economic growth without London. We strongly urge the government to closely consult London's business and investment community on the policy detail to avoid damaging its own growth mission. When London succeeds, the whole country succeeds."

ENDS

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