The Chancellor’s forthcoming Budget is being billed as a quiet affair. With the public finances under pressure and little room for significant spending commitments, the emphasis is expected to be on fiscal discipline and reassuring financial markets.
But I think the Chancellor has something more ambitious in mind. Ultimately, the budget is the primary opportunity to make real the rhetoric around ‘rewiring the state’. My prediction is that regional growth will be a defining message of his Budget speech, and central to his argument for how the Government intends to grow the national economy.
More specifically, I expect him to argue that Britain’s underperforming cities represent one of the country’s biggest untapped economic opportunities, and that unlocking this potential requires changing how economic decisions are made. Fiscal devolution, stronger mayoral institutions and transferring power from Whitehall will be presented not simply as devolution reforms, but as essential components of the Government’s economic strategy.
Some might even call it a ‘theory of growth’.
And there are three good reasons why I think he will, and should, make this argument.
First, Britain’s big cities are both central to national growth and a major
New Centre for Cities research, published last week, shows that Britain’s cities occupy just 9 per cent of the country’s land but account for 62 per cent of its full-time jobs and 73 per cent of its higher-paid jobs. And over the past decade, they generated three-quarters of all new jobs and nine in ten new higher-paid jobs nationally.
But despite their importance, Britain’s largest cities outside London continue to underperform. In most advanced economies, big cities are among the most productive places. In Britain, the opposite is often true. Birmingham, Manchester, Liverpool and Sheffield all have productivity levels below the national average.
The economic prize from addressing this is substantial. Centre for Cities’ Big Cities Outlook 2026 estimated that if Britain’s big cities matched the national productivity average, the UK economy would be £35 billion larger each year – equivalent to adding another Leeds to the national economy. Matching the performance of comparable cities in France and Germany would increase output by an estimated £104 billion.
There are encouraging signs of improvement in cities such as Manchester, Liverpool and Leeds. But the wider point remains: Britain will struggle to achieve sustained national growth without improving the economic performance of its big cities.
Second, regional growth allows the Chancellor to demonstrate ambition without relying on large new spending commitments.
The Burnham Government has put devolution, fiscal reform and rewiring Whitehall at the centre of its programme. The Budget offers the Chancellor an opportunity to bring these reforms together as part of a national growth strategy.
Giving mayors greater flexibility over existing resources, stronger fiscal incentives to grow their economies and the capacity to deliver offers a way to improve economic performance when public finances are constrained.
Devolution is not a substitute for investment, nor will it automatically deliver growth. But more informed decisions about existing spending, removing barriers to private investment and building stronger local institutions can help get more growth from the resources already available.
Third, the politics are compelling.
The Government needs to demonstrate that its economic strategy amounts to more than managing the public finances. Regional growth offers a positive account of how it intends to make the economy more productive, create better-paid jobs and raise living standards.
This matters politically. People don’t judge the economy by national GDP figures. They judge it by the jobs available to them, what they earn and the opportunities available to their families. Regional growth connects the Government’s national economic ambitions to these everyday concerns.
It also reinforces the Prime Minister’s economic and devolution agenda, while speaking directly to voters who want to see improvements in their local economies.
All of which is why I think regional growth will feature much more prominently in the Budget than the current ‘quiet Budget’ narrative suggests.
The Chancellor has already committed to moving more money and power out of Westminster. But I expect him to go further on Budget day, making the case that improving the performance of Britain’s cities and regions, backed by fiscal devolution and stronger mayoral institutions, is central to getting the national economy growing.
Whether the Budget contains significant new policy announcements is a separate question. Given the fiscal constraints, it may not. But that does not diminish the importance of the message.
A quiet Budget may make fiscal sense. A quiet message on growth does not.
My prediction is that the Chancellor understands this. On 28 October, I expect him to put regional growth at the heart of his Budget’s economic argument. I hope I’m right.
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