No 10 hands mayors more cash in business rates and income tax take

Regional mayors will be handed more cash with plans to give them a slice of income tax and business rates, the Chancellor has announced.Under a ‘roadmap to fiscal devolution’, John Healey said 20per cent of business rates will be retained locally next year - rising to 100per cent by the end of the decade. Mayors will also receive a share of income tax from 2028-29 - and be given the power to impose an unlimited 'overnight visitor levy' on stays in hotels, B&Bs and holiday lets from 2028.Mr Healey described the local retainment of tax revenues as ‘the most radical act of devolution in a generation’.He added: ‘Taken together, these are long-term funding streams. They can be used to back investment into big local infrastructure so that more of the money that is raised locally can be spent on projects like the Trent Sport District, led by the mayor of the East Midlands, and the Bakerloo Line extension, led by the mayor of London.‘[These are] new powers to the people who know their areas best – not sentimentality but supply-side economics. The biggest wave of devolution in a generation.’But the Tories said Labour mayors were only interested in spending ‘other people's money’.Katie Lam, shadow housing, communities and local government secretary, told the Mail: 'Andy Burnham doesn't care about local government. Chancellor John Healey and Prime Minister Andy Burnham pictured at a community centre cafe in Westminster after the Budget‘He's just looking for yet another excuse to put up tax and take more of people's hard-earned money.'Labour mayors have shown, time and again, that they're only interested in spending other people's money, and creating yet more rules.'If Burnham and Rayner are really serious about empowering local leaders, why won't they let them cut taxes and support businesses?'The Treasury confirmed retained business rates for mayors would replace grants from central government.The Government said it will seek views from local government on how best to achieve this, with a call for evidence planned for later this year.Discussions on 10 new devolution deals are said to be close to agreeing mayoral strategic authorities.The areas involved are Devon, Plymouth and Torbay; Hertfordshire; Lancashire; Leicester, Leicestershire and Rutland; Stoke and Staffordshire; Surrey; Thames Valley (Oxfordshire, Berkshire and Swindon); and Wessex.There will also be a single ‘foundation’ strategic authority for Cornwall and a strategic authority for Kent and Medway.The Government said it will continue working with all remaining areas, including Bedford, central Bedfordshire, Luton and Milton Keynes where there is broad agreement but not yet local consensus, to agree a strategic authority as soon as possible.The Treasury added: ‘This will mean that over 90per cent of England’s population will have a devolution agreement in place, with the entirety of the north of England covered by mayoral devolution for the first time.‘The Government is determined to help local leaders deliver good growth immediately and today we are also confirming £285 million in 2027-28, including £120 million of incubator capital funding, for areas transitioning towards a devolution deal or strategic authority status.’Responding to the announcements, the County Councils Network (CCN) called for devolution to go ‘deeper’, with access to powers and resources in rural areas ‘on par with urban mayors’.But travel trade association, UKinbound, criticised the proposed implementation timeline for the overnight visitor levy.‘The industry needs a minimum 18-month implementation period once the details have been finalised. Businesses are already contracting and selling holidays for 2028, making the proposed timetable unrealistic.’Labour's Abena Oppong-Asare, chairwoman of the Commons Housing, Communities and Local Government (HCLG) Committee, said: ‘On the fiscal devolution roadmap, it’s important that strategic authorities have the capacity and capability to make the most of their new powers and that the right accountability measures are put in place.’