Andy Burnham has been accused of “hypocrisy” after a row erupted over his plans for mayors to keep a share of taxes collected in their area. The Prime Minister announced today that mayors in England will be allowed a slice of income tax and business rates as part of his push to move power out of Westminster.
Some Tory and Reform UK mayors suggested they would use the powers to hand back cash to local taxpayers, but this was slapped down by Mr Burnham. Speaking at a community centre in Sheffield, he said: “This is not about making them mini-chancellors of the exchequer, undermining or rewriting policy on tax and personal finance.
“This is a policy for growth and investment. It’s a very clear policy of the kind that Greater Manchester has benefitted from over the last decade where if you get more growth in your economy, you’re given an incentive to do that because you can keep more of the proceeds of that to then keep investing and keep the growth going.”
Shadow Local Government Secretary Sir James Cleverly said the “hypocrisy of Labour’s top-down devolution agenda” had been “laid bare”.
He added: “Labour say they want to empower local communities, but instead, ministers in Whitehall are telling local leaders what they can and can’t spend their money on.
“They are blocking tax cuts while slashing funding for councils with low tax rates, trying to force them to hike bills if they want to keep services going.
“Labour want to impose their high-tax model across England, and make families pay the Burnham penalty. The Conservatives are the only party that will cut taxes, cut the welfare bill and get Britain working again.”
The Prime Minister, who is a former mayor of Greater Manchester, described the proposals as “the biggest shift of power out of Whitehall and Westminster” to regions across the UK.
Louise Haigh, the First Secretary of State, who has been overseeing the Whitehall devolution drive, insisted that it would not be “possible at the moment” for mayors give tax rebates to local residents under the plans.
Tory mayor Lord Houchen said: “So devolution means getting people’s taxes to spend but not being allowed to give it back to them.
“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.
“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.”
Details of the reforms are expected to be announced when Chancellor John Healey gives his first budget in the autumn.