English mayors would be allowed to retain a share of income tax and business rates raised locally under Andy Burnham’s proposed devolution reforms. The policy is intended to give regional leaders a stronger financial incentive to grow their economies and more resources for transport, housing and job creation, reducing reliance on decisions made in Westminster.

The proposals are expected in a white paper alongside the autumn Budget, although mayors would not gain the power to set income tax rates themselves. The Government says taxpayers’ rates would not change and an equalisation system would continue supporting lower-revenue areas. Existing mayoral areas include Greater Manchester, Liverpool City Region and South Yorkshire, with new mayoral elections planned in areas including Greater Essex and Hampshire and the Solent.