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How is this how the UK tax system works?

Do you simply mean that the counties get most of their income, not from local tax but from national tax? This then counts as 'stealing from the city' because most of the national income is created by the city?

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I think this is amusing because a lot of those cities are stealing jobs so it is only fair for them to pay.

I never understood this attitude (assuming it's serious). If a job is created in a city that wouldn't exist in the country, where is the stealing? To me this sounds like the city is creating value _ex nihilo_, and the "payment" here is an orthogonal, collectivist redistribution.

The city is stealing people from the country. And a lack of people leads to a lack of jobs. Because fewer people means fewer amenities and services (less shops, less offices, no more swimming pool, less budget for nice things in the municipality). And few people and little amenities and services make it less attractive to start a business there, because it is hard to find employees locally, and hard to attract them from far away because of the amenities.

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