December 2025 roundup
Exploring fiscal fairness, political transparency and tax accountability as we wrap up 2025
As 2025 draws to a close, we’ve been contributing to conversations about fiscal devolution, accountability in the tax system, and political transparency. Here’s a quick roundup of what we wrote about in December, and what others had to say on the same topics.
This is a new feature that we’ll run once a month, at the end of every month, as one of our regular weekly posts (the rest of which will continue to alternate between opinion articles and report summaries, but will also feature interviews with key experts and thinkers). If you would prefer to hear from us monthly rather than weekly, you can change this by editing your email preferences, but by default you are still opted in to the regular weekly posts (‘Fair Comment’) as well as these monthly roundups.
Exploring fiscal devolution in our new report
December brought the release of our new report, A Fair Share. The report is based on interviews with a wide range of stakeholders, including Mark Drakeford and Nicola Sturgeon, and explores the link between greater fiscal devolution and narrower regional inequalities. It outlines how to end the UK’s status as one of the most fiscally centralised economies in the developed world, and how to share wealth more fairly throughout the economy to benefit every community.
While momentum on fiscal devolution has grown in recent months, not least through the Budget’s announcement of new devolved tourism levy powers, the Government’s current legislation - the English Devolution & Community Empowerment Bill - sidesteps the issue altogether. That’s despite Secretary of State Steve Reed previously indicating his support for fiscal devolution. In fact, the Chair of the Housing, Communities and Local Government Committee, Florence Eshalomi MP, has called fiscal devolution “the one omission from the Bill”.
Of course, tourism levy powers are welcome. They have been called “the acceptable face of fiscal devolution” and, as the Institute for Government has said, represent “an important step towards greater fiscal devolution”. Yet they are no substitute for the kind of “bold and ambitious” progress on fiscal devolution that is needed. As the report argues, if further progress on fiscal devolution isn’t secured, the UK will remain an outlier on this issue.
In our report, we call for a new direction through a long-term approach, exploring a series of possible measures, including a Tax Devolution Commission to review the tax code and new legislation to ensure that no area is left behind.
Our findings reflect previous comments from the Chief Executive of the Northern Powerhouse, who has called fiscal devolution “a critical next step in strengthening the powers of mayors”, previous calls from Mayors such as Andy Burnham to accelerate fiscal devolution, and a report from Labour Together that called for greater devolved revenue-raising powers for major cities.
You can read the full report here and our op-ed in the Yorkshire Post here.
Calling for political donation caps
This month, we also took the opportunity to call for a fairer democracy, by highlighting the UK’s status as one of the few major democracies that hasn’t set a limit on political donations, in a new joint op-ed with Transparency International UK (TIUK).
This followed new TIUK polling, which revealed that 84% of people believe that wealthy individuals use political donations to advance their personal interests, echoing our previous research, which found that 75% of people think the very rich have too much influence on politics.
We argue that caps on political donations of more than £50,000 could help to build a fairer system where politicians are more accountable to the public, and where integrity and transparency protect democratic decision-making.
Our comments follow news of the largest ever single donation by a living person to a British political party, and the previous confirmation that last year’s poll was the most expensive general election in history.
Earlier this month, the Government published its UK Anti-Corruption Strategy 2025. The strategy aims to protect against corrupt actors seeking to exploit the UK’s political financing framework, and includes strengthened rules on company political donations, among other measures. However, it stops short of introducing caps on donations. Next year, the Government will introduce its Elections Bill and will host an Illicit Finance Summit to marshal a global effort against flows of dirty money. A previous petition to cap donations reached almost 145,000 signatures and was debated in Parliament last year.
You can read our full joint op-ed with Transparency International UK here.
Making HMRC work fairly for everyone
In a guest post, the Director of TaxWatch, Mike Lewis, outlined the importance of improvements to HMRC to boost fairness and improve the state of public finances. As Mike’s piece highlighted, one in 10 individuals and small businesses surveyed by HMRC last year reported that the tax authority had made an error in their dealings with them, while the proportion of people who reported a good experience in dealing with HMRC stood at 52%, an eight-year low.
In fact, only 27% of surveyed individuals felt that HMRC applies penalties and sanctions fairly to all taxpayers. The piece argues that HMRC needs to make individual and small business taxpayers believe that they are being treated fairly in order to improve trust in the institution and to improve compliance in the long run.
This follows a suite of new measures announced in the Budget to enforce tax compliance, which, as the piece points out, represents the third-largest revenue-raising mechanism in the Budget. However, TaxWatch has previously found that there are serious questions over whether HMRC is effectively using its current tools and resources to chase avoidance and evasion.
Moreover, the announcements followed a “year of drift on offshore secrecy”, earlier calls from an MP for HMRC to reveal the data it holds on the overall offshore tax gap, and suggestions that the gap - which has grown to around £47bn - could be a serious underestimate.
You can read TaxWatch’s annual ‘State of Tax Administration 2025’ here.
From fiscal devolution to political transparency, our December work reflects part of our bigger mission at the Fairness Foundation: building a fairer economy that shares wealth and power equitably throughout society. Thank you for following us! Next year, we’ll build on the progress we’ve made by looking in more detail at the difference between wealth extraction and wealth creation.
Strong argument for the 50k cap especially when you frame it against that 84% polling data. The comparison to other democracies is telling becuase it shows the UK isn't just an outlier but actively choosing a system where money talks louder than votes. I've worked in campaings before and the whole donor access thing creates this weird dynamic where elected officials spend more time courting checks than constituents. The Anti-Corruption Strategy missing this seems like a massive oversight.