Writing in Bdaily this week, North East Chamber of Commerce chief executive John McCabe made the business case for the government's fiscal devolution package, mayors retaining a bigger share of the tax revenue their areas generate. He calls it the "financial firepower" the region needs.

He's right that discretion over spending, not just responsibility for delivery, is what's been missing from devolution deals so far. McCabe says his argument echoes what the Chamber told government in its response to the Northern Growth Strategy consultation, which closed alongside the fiscal devolution announcement on 31 July.

McCabe is also making a second argument, but it sits on a different track entirely. "Business rates remain an outdated tax that too often discourages investment," he writes. "If greater business rate retention is part of the package, it should also mark the beginning of fundamental reform." That question is separate from the changes to business rates that have already taken effect.

From April 2026, business rates in England run on a new multiplier structure agreed at last autumn's Budget. Retail, hospitality and leisure properties get two new permanently lower multipliers, 38.2p for those with a rateable value under £51,000 and 43.0p for those between £51,000 and £499,999. That replaces the previous system's temporary, capped relief for the sector.

Properties of any type with a rateable value of £500,000 or more, from large distribution warehouses to big-box stores and large offices, carry a higher multiplier of 50.8p to help fund the difference. HM Treasury's own costing shows this specific swap, the lower retail, hospitality and leisure multipliers funded by the high-value multiplier, is designed to be close to fiscally neutral, within roughly £35 million to £50 million a year between 2026-27 and 2028-29.

The OBR's more commonly quoted £1.2 billion estimate for reduced business rates receipts over the same period covers the whole business rates package, including revaluation transitional relief and extended local authority retention, not this multiplier swap on its own.

That's a real structural change, but it is separate from devolution. It moves money between ratepayers rather than mayors. Smaller retail, hospitality and leisure properties pay less under the new multipliers, while premises above the £500,000 threshold pay more. The multiplier changes were set months before Andy Burnham's government announced that mayors would retain a greater share of the revenue collected in their areas.

The reform McCabe is calling for is bigger than the multiplier changes already delivered. It's the kind of wholesale rethink that business groups nationally, the British Chambers of Commerce among them, have pressed for over several years: a tax less tied to occupying a physical premises and more reflective of what a business actually turns over. That's an older, larger argument than this year's Budget settled, and a fair one for the Chamber to keep making.

It's also aimed at a different lever than the one fiscal devolution pulls. The multiplier structure, the reliefs and the revaluation cycle all stay reserved to the Treasury. What changes under the 31 July announcement is how a greater share of the revenue raised locally is retained within the region.

From spring 2027, that gives the North East's two mayors, Kim McGuinness at the North East Mayoral Strategic Authority and Ben Houchen at Tees Valley Combined Authority, greater control over a share of the business rates revenue their areas generate, rather than seeing all of it channelled through Whitehall first. Income tax retention is due to follow from 2028, with detail set out in a roadmap at the Budget.

Fiscal devolution does not change the business rates system itself. Reform of the tax is a separate question, and one for the Treasury, not for this settlement.