Giving mayors a share of tax collected will ’empower’ regions, Burnham says

Andy Burnham has said his plans for England’s mayors to keep a share of taxes collected in their area will give them “more in their hands” to empower their regions.The Prime Minister announced on Friday that regional mayors will be allowed to keep a slice of income tax and business rates to spend on their priorities, as part of his drive to push power out of Westminster.His proposals have already drawn criticism from Reform and Tory mayors, who signalled they wanted to use the powers to give their taxpayers a rebate, but have been told this will not yet be possible.Mr Burnham on Friday described the proposals as “the biggest shift of power out of Whitehall and Westminster” to regions across the UK.Speaking at a community centre in Sheffield, he said: “What brought me into politics was a determination to make sure, wherever you live in this country, the postcode where you live, or where you were born, doesn’t actually determine what your life should be like. That’s what I’m on a mission to change.“No kid here, born in any of these streets around here, should have a harder life or fewer life chances than anyone born anywhere else, and that’s what this is all about.”The Prime Minister added: “This is a day when all of the forgotten places across Britain, and there are many of them, this is a day when they can all feel heard today, and they can feel empowered today, and they can know from today that they’ll have more in their hands to go out there and do more to lift their places up, and that’s what this is all about.“That’s why I’m so proud to be standing in front of you today to announce that.”Ahead of Mr Burnham’s announcement, several mayors said they would create schemes to put money back into the pockets of taxpayers instead of investing in public services, including Conservative Tees Valley mayor Lord Houchen of High Leven.Lord Houchen, mayor of the Tees Valley, has criticised the plans (Danny Lawson/PA)PA ArchiveBut Louise Haigh, the First Secretary of State, who has been overseeing the Whitehall devolution drive, told broadcasters it would not be “possible at the moment” for mayors to give their local residents tax rebates under the plans.“There’s not a system that would currently allow that, and they certainly wouldn’t be able to set tax rates locally or regionally, but we’ll consider what proposals are put forward,” she also told BBC Radio 4’s Today programme.Tory mayor Lord Houchen criticised Ms Haigh’s remarks on social media site X.He said: “So devolution means getting people’s taxes to spend but not being allowed to give it back to them.Read More“Last time I spoke to the PM, devolution was about Whitehall not dictating what areas can or can’t do.“Doesn’t sound much like devolution to me? Just an excuse for a tax grab.”Louise Haigh said proposals for the scheme would be considered (Yui Mok/PA)PA WireLord Houchen added: “They want to reward mayors for growing the economy but the best way to grow the economy is to let people keep more of what they earn.”Mr Burnham later directly rejected the idea of mayors giving their taxpayers rebates, telling reporters in Sheffield the plans were not about making the local leaders into “mini-chancellors of the exchequer, undermining or rewriting policy on tax and personal finance”.Speaking to broadcasters, he said the proposals was about “growth and investment”, adding: “Britain is lagging on this front in the G7 because we are not investing as much as other countries in industry, in infrastructure, in housing. This is a growth agenda and an investment agenda, not a cuts agenda, because the cuts agenda has left us in a difficult position.”He added: “We’re not going to repeat some of the mistakes of the past, the austerity of the past that then has left us with a low-investment, low-growth economy. This policy is designed to break that cycle.”Under the plans, the share of taxes will only be given to areas which have regional mayors, which include Greater Manchester, the Liverpool City Region, Cambridgeshire and Peterborough and South Yorkshire.They have powers over issues such as transport, skills and infrastructure planning.Details of the reforms – including what proportion of taxes the local leaders will keep – are expected to be announced in a white paper, published when Chancellor John Healey presents his first budget in the autumn.Chancellor John Healey is expected to announce a white paper at the next budget (Yui Mok/PA)PA WireThe rate of income tax that billpayers face will not change as a direct result of the reforms, according to the Government.Ministers will retain an equalisation system, so areas where less tax is collected continue to receive financial support.As a result of Mr Burnham’s move to push power out of Westminster, both central Government and the Civil Service could be trimmed down, with a Cabinet statement accompanying the devolution plans suggesting they will become “smaller and more strategic”.Mr Burnham told reporters that the plans “could mean transfer of personnel and capability into the regions”.The paper also said the Government will give regional mayors and authorities across England the power to introduce a tourist tax, which it suggested could collected and spent from March 2028.Differing boundaries between local government, health authorities and police forces could meanwhile be streamlined to avoid confusion about which authority provides services to which area, the Cabinet statement said.