Prime Minister Andy Burnham has announced that mayors in England will retain a share of income tax and business rates collected in their regions, as part of a major redistribution of power. The move is intended to give local leaders more resources to decide how to spend on local priorities, including public transport, housing and job creation.
Details of the plan
The government stressed that the rate of income tax paid by the public will not change. The full plans will be unveiled when Chancellor John Healey presents his first budget in the autumn. 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.'
Large areas of England currently have a mayor, including Greater Manchester, the Liverpool City Region, Cambridgeshire and Peterborough, and South Yorkshire. These leaders already have powers over transport, skills and infrastructure. New mayoral authorities are also planned for Greater Essex, Hampshire and the Solent.
Reactions from opposition
The Conservative Party warned that Burnham was too focused on 'Manchesterism' and risked sidelining local councils. Shadow local government secretary Sir James Cleverly said: 'Andy Burnham is right to want to encourage growth in all communities. But his top-down Manchesterism will lead to higher taxes, with no guarantee of better outcomes for local people. Devolution cannot be imposed from above – it can only work if it’s done in co-operation with local people. But Labour’s regionalist approach takes power away from local communities, sidelining local councils and ignoring local identities. What works in Manchester won’t be the same for Essex, Cornwall or Cumbria.'
Liberal Democrat concerns
The Liberal Democrats warned that devolving tax revenues only to mayoral areas would create a 'two-tier system'. Lib Dem local government spokeswoman Zoe Franklin said: 'Councils across England serve millions of people who deserve the same powers and resources as any city region. Devolution cannot become a two-tier system where you only get real powers, and access to extra income tax revenues, if you have a metro mayor. We will analyse the detail carefully when it is published and continue to fight for every community across England to benefit from devolution.'
