Prime Minister Andy Burnham will hand the North East mayor a share of income tax revenues, under what is being labelled the biggest transfer of power and money out of Westminster in a generation. The plans, to be launched on Friday, aim to give local leaders greater resources and freedom to build houses, upgrade transport systems like the Tyne and Wear Metro, and tackle youth unemployment.
Tax Retention and Local Control
Kim McGuinness and fellow metro mayors will keep a share of income tax and business rates. Downing Street described the shift as the largest package of financial powers ever offered to English mayors, something that can “end the Whitehall-first culture that has held back local areas for decades”.
Mr Burnham said: "I said we'd take power out of Westminster and carry it into every postcode in the country. Today, we make good on that promise. Under our plans, more of the taxes raised in a community will stay in that community. Soon, every local leader will have the power and resources to improve public transport, build homes and create jobs."
Details of the Powers
The Government says further details will be set out in the Budget later this year, but mayors would start retaining a share of locally-generated business rates from next spring. Mr Burnham’s No 10 North operation in Manchester will drive the reforms, aiming to unblock stalled transport infrastructure and regeneration projects.
The promised powers include: bringing rail and bus services under greater local control for integrated ticketing and more reliable services; stronger planning powers and more funding to build homes and unlock stalled development sites; control over 16-19 funding and employment support; and removing Whitehall barriers for transport schemes, potentially including the Tyne and Wear Metro extension.
North East Reaction
Mayor Kim McGuinness, who wrote to Chancellor John Healey with a list of devolution demands earlier this week, said the PM’s pledge was “what we’ve been fighting for”. She added: "For decades, whenever the North wanted something, it had to go to London each time, cap in hand to beg a civil servant or a Government minister to back us. We’re changing the North East for good, and much greater financial freedom is the first step.
“This means we can do more to support hard-pressed families through things like cheaper Mayor’s Fares and childcare grants; it means we can grow the Metro and rail network, build more council homes and open youth clubs to give young people the opportunities they deserve regardless of their background. Now we can step up and market the North East to the world as a visitor destination and a place to invest, creating new jobs as we do so by helping our people and businesses thrive and grow. The days of asking Whitehall’s permission are over. We can now just get on with the job and improve the lives of people here in the North East, now and for generations to come."
