Local leaders to be given powers to choose how some income tax is spent, Reeves announces
Local leaders will be given the power to control a share of some national taxes under new plans unveiled by Rachel Reeves to boost growth in towns and cities outside London.
The Chancellor put securing investment in regions outside the capital at the heart of his economic growth plan at a conference in London on Tuesday.
Speaking at Bayes Business School in London, Reeves said he wanted officials to prepare a roadmap for future “financial devolution”; This road map could also include powers given to local leaders to control some of the national tax revenues.
He said the plans would be published in the Budget in the autumn.
“I have asked my officials to work with mayors and businesses to develop a roadmap for the future fiscal rollover that will be published in this year’s budget,” he said.
“This will set out plans to give regional leaders some control of some of the national taxes that have been allocated by central government for too long.
“They will look at income tax as well as other taxes, and the reforms will initially target places with the greatest capacity to deliver those taxes and the greatest potential for benefits.”
He said the move to transfer control of some national taxes from the Ministry of Finance to regional leaders would not increase the tax burden.
Reeves also outlined £2.3bn of new funding to be distributed by mayors in the largest city regions, with a focus on the North and Midlands, to support growth and attract private investment.
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