Metro mayors ‘should be given powers to cut taxes’, says Gove

MAYORS SHOULD be given American-style powers to make tax cuts in order to deliver levelling up, Michael Gove has said.

The Levelling Up Secretary told MPs yesterday that increasing fiscal devolution could help “Redcar become the Nashville of England” by allowing Tory mayor of Tees Valley Ben Houchen to bring in tax cuts similar to those being introduced in Tennessee.

In the US state, Governor Bill Lee is bringing in substantial tax cuts, including levies on food items, from next month. Mr Houchen argued earlier this year that allowing mayors to slash business rates would help the Government to deliver on levelling up by encouraging private sector investment.

Speaking to the Levelling Up, Housing and Communities Committee

yesterday, Mr Gove said that he is “very keen to see a move towards greater fiscal devolution” but added that care needed to be taken to ensure any such move did not unintentionally end up increasing regional inequalities.

“If it were the case that you had a significantly greater devolution of control over retention of business rates, that would be fantastic for London and not so great for the rest of the country,” he said.

“But I do think that we need to move in that direction because as devolution becomes more widespread and deeper across England, there needs to be a greater degree of accountability for what mayors and others are doing. To my mind, that accountability is having to make decisions about raising revenue.”

When asked whether levelling up can be achieved without greater fiscal devolution, Mr Gove said: “No.”

“What I strongly believe is that the experience of the United States, the experience of Germany, the experience of Switzerland, the experience of the Netherlands is that if you have a measure of fiscal devolution that sooner or later people recognise that if you want to stimulate economic activity you reduce taxes.

“I was in the United States looking at urban regeneration and one of the points that was made to me is that Nashville is booming because Tennessee has gone for a low tax approach.

“Similarly if Ben Houchen were able to do everything he wanted in taxation terms, it would be the case that Redcar would become the Nashville of England.”