Tory and Reform mayors plan to hand tax rebates to local residents under Andy Burnham's devolution drive

By GREG HEFFER, POLITICAL CORRESPONDENT Published: 08:51, 30 July 2026 | Updated: 08:53, 30 July 2026 Tory and Reform UK mayors are planning to hand tax rebates to local residents under Andy Burnham's devolution drive. The Prime Minister is expected to unveil plans on Friday for mayors to be handed a share of income tax revenue to spend locally. His team are also said to be considering proposals to devolve aspects of business rates in a bid to reward regions that grow their economies faster. Mr Burnham, the former Greater Manchester mayor, entered Downing Street with a vow to take power away from Westminster and 'carry it into every postcode in the land'. His plans to devolve new spending powers to local leaders have been pitched as a means of boosting local investment on infrastructure and public services. But Tory and Reform mayors are instead intent on lowering the tax burden for their voters. Ben Houchen, the Tory mayor of Tees Valley, said he planned to use new freedoms to make his region 'a more attractive place and a more competitive place to invest in than Manchester and London'. 'Every mayor is backing fiscal devolution because they want more money to spend in their area,' he told The Times. 'However, if the Tees Valley is handed a slice of local income tax and business rates generated locally, I'll create a new rebate scheme to put money back into people's pockets and let families keep more of the money they earn.' The Prime Minister is expected to unveil plans on Friday for mayors to be handed a share of income tax revenue to spend locally Ben Houchen, the Tory mayor of Tees Valley, said he planned to use new freedoms to make his region 'a more competitive place to invest in than Manchester and London'. Luke Campbell, the Reform UK mayor of Hull and East Yorkshire, is also said to be exploring plans to hand local taxpayers a rebate Mr Houchen added: 'Fiscal devolution must be about giving places like Teesside the power to do things differently, back growth and reward the people that drive our local economy instead of squeezing every last penny out of them.' He told the newspaper that he was in discussions with the Treasury over how best to structure the tax relief.  Luke Campbell, the Reform mayor of Hull and East Yorkshire, and Andrea Jenkyns, the Reform mayor of Greater Lincolnshire, are also said to be exploring similar plans. But a Government source said regional mayors would struggle to pass on any additional cash to local taxpayers due to the pressure on their budgets. 'We all remember how they made wild promises about reducing council tax by cutting waste to get elected,' they said. 'But when they got in they were forced to backtrack. So let's see how this works.' Alex Walker, senior researcher at the Re:State think tank, said: 'Greater Manchester and the West Midlands have shown what's possible when areas are able to keep hold of more business rates growth and reinvest it in the region. 'Other mayoral areas should also have this opportunity as part of a broader package of fiscal devolution that unlocks greater flexibility and accelerates regional growth plans.'