Antonia Jennings, CEO at Centre for London, comments on what London needs in the Autumn Budget. 

Fiscal Devolution

“Publicly, Burnham has professed his faith in the capital – kicking off his premiership by naming London the ‘best capital city in the world’. Now, it’s time to put his money where his mouth is and ensure London is not left behind as he advances his devolution agenda.”

“Across the last few decades, London has been late or left out entirely of devolution discussions. Levelling Up largely ignored extremely high poverty rates in London, while the Integrated Settlement was given to other areas in April 2025, introduced to London a year later in April 2026.

True devolution should strengthen the powers of mayors and local authorities across the country, and that must include London. The capital is a major driver of the UK economy, producing £1 in every £5 sent to the Treasury, but is also home to millions of people facing poverty and housing insecurity. If the justification for devolution is a combination of unlocking growth and giving places the tools to shape their own future, that principal has to apply to London too. Khan should be offered the same devolution settlement as other parts of the country, including the retention of a share of the income tax generated in the capital.

“But London’s devolution settlement also needs to reflect the uniqueness of the capital itself. London has a different scale, economic make up and governance model to any other part of the country. Any future settlement should recognise these differences, rather than applying a one-size-fits-all approach. In practice, that should mean a dedicated London chapter in the forthcoming White Paper.”

“Growth in every postcode is the headline from Burnham. To achieve this through fiscal devolution there are two key tests. Firstly, fiscal devolution must mean genuinely new powers and sustainable funding streams, not simply a repackaging of existing grants. It must be an additional power or freedom.

Secondly, every commitment to local growth must include a clear role for boroughs. And that’s particularly important in our current environment where borough finances are in crisis. A quarter of London’s boroughs are currently reliant on emergency funding support, while rising homelessness and social care costs continue to place local government under enormous pressure. Without sustainable finances, local leaders will remain trapped firefighting short-term crises rather than investing in the long-term solutions their communities need.”

“If Burnham wants a genuine transfer of power from Westminster, London cannot be an afterthought. The capital needs a devolution settlement that reflects its economic importance, provides genuinely new fiscal powers and gives local and regional government the tools to drive growth and opportunity across the city, and for the rest of the UK.”

Replace Stamp Duty and Council Tax with a progressive, partially devolved Proportional Property Tax

“There’s another major area of reform that Burnham has so far been reluctant to tackle – property taxes. That has to change.”

“The current system is no longer fit for purpose. Stamp Duty acts as a tax on moving, making it harder for people to move into homes that fit their lives, whether that’s older Londoners looking to downsize or families needing more space. Council Tax is based on property values that are decades out of date, unfairly taxing housing across London and elsewhere. Together, these taxes distort the housing market – worsening our housing crisis.

A Proportional Property Tax is a necessary next step, but some models could actively worsen the cost-of-living crisis.

Many popular proposals apply a flat rate to every property, centralising revenues in Whitehall. For London, that risks creating unaffordable tax bills for households whose property values have risen significantly – without a corresponding increase in income – and adding yet another barrier for first time buyers. At the same time, it would strip away one of the few tax-setting powers currently available to councils and the Mayor, undermining Burnham’s wider push for devolution.

Centre for London has an alternative proposal – a progressive, partially devolved Proportional Property Tax. Under our model, existing local and regional tax-setting powers would be retained, preserving democratic accountability. Homes worth under £800,000 would pay broadly what they pay today in Council Tax, while benefitting from the abolition of Stamp Duty. Higher-value properties would contribute more through a progressive model.

As pressure builds on Burnham to address our property tax system, we want to see a full review of our property taxes, and a move towards a model that supports mobility, fairly taxes housing wealth and strengthens local democracy. Reform is overdue, but it must be done in a way that works for Londoners rather than creating a new affordability crisis.”

• Centre for London is an independent think tank. A voice for all London is, and could be. We have no ties to any political party or any part of local or national government. We are a registered charity, no: 1151435.
• For press enquiries for Centre for London, please contact katie.townsend@centreforlondon.org, 07570 605754.
• Available spokespeople for Centre for London include Antonia Jennings, CEO, Rob Anderson, Research Director and Daniel Reast, Senior Researcher