Government's Tax-Sharing Plan for Mayors Sparks Bipartisan 'Wait, What?' Response
Government's plan to share income tax with regional mayors gets a lukewarm reception, with Tories demanding rebates and Labour MPs crying 'discrimination' - devolution, it seems, is complicated.
The government's grand plan to let regional mayors keep a slice of income tax and business rates has gone over about as well as a soggy chip butty at a formal dinner. The proposals, which would see metro mayors in England pocket some local revenue for public services, are being hailed by Prime Minister Andy Burnham as 'the biggest shift of power out of Whitehall and Westminster' since... well, ever. But not everyone is raising a toast.
Conservative Tees Valley Mayor Lord Houchen, ever the party pooper, suggests a better use for that money: giving it back to taxpayers via rebates. 'The prime minister has said he wants to alleviate the cost of living crisis and give people room to breathe,' he told BBC Radio 4's World at One, 'what better way to do that than allow them to keep more of their own money?' First Secretary of State Louise Haigh countered that there's currently no mechanism for rebates, but Houchen insists it's 'not beyond the wit of man' to create one. Because, really, how hard could it be?
Burnham, meanwhile, pooh-poohed the rebate idea, insisting the plans aren't about turning local leaders into 'mini-chancellors of the exchequer, undermining or rewriting policy on tax and personal finance.' Right, because giving them a share of national taxes is totally different.
Under the current system, mayors of English strategic authorities rely on central government grants for most of their funding. But starting April 2027, they'll retain some business rates revenue, and from April 2028, a portion of income tax. The tax rates themselves won't change - so no, you won't be paying more, just funding more local 'empowerment.'
Burnham, the former Greater Manchester mayor, has made devolution his centrepiece, promising to 'bring power home' to 'every postcode in the country.' Chancellor John Healey will spill more beans in his first Budget on 28 October.
Labour mayors are, predictably, thrilled. West Yorkshire's Tracy Brabin says people will 'see and feel the real benefit of their hard work and where that money is going.' West Midlands' Richard Parker calls it 'phenomenal,' 'a sea change,' 'monumental.' But backbenchers are less starry-eyed. Sean Woodcock (Banbury) notes that poorer areas still need central redistribution, and without it, 'a lot of areas will see minimal benefit.' Perran Moon (Camborne and Redruth) calls the plans 'discriminatory,' creating a 'two-tier system' where areas without mayors miss out. He wants the same powers without the hassle of a mayor or combined authority - because who needs bureaucracy?
Shadow chancellor Sir Mel Stride says the announcement is 'very short on detail' with 'no new money,' potentially shortchanging weaker economies. The Liberal Democrats warn of a 'postcode lottery' leaving rural folk 'short-changed and underfunded.' And Reform UK's Zia Yusuf, ever the opportunist, wants devolution of powers to stop housing illegal migrants - because that's clearly the issue at hand.
So, the government's devolution dream is off to a rocky start, with critics from all sides asking: if mayors get to keep the tax, why are we still paying it?
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