Chamber welcomes Chancellor’s push for greater fiscal devolution

The Chancellor’s plans to give regional mayors a share of national taxes to invest in their areas presents “a significant opportunity” for the West Midlands, business leaders said today.

During her annual Mais lecture at the Bayes Business School in London, Rachel Reeves said the reforms would focus on giving regions a better say over how they spend revenues generated by economic activity in their area.

This would include giving mayors a share of national taxes, including income tax.

She said the government will publish a “road map for future fiscal devolution” at the budget in the autumn, adding that the task force would “look at income tax, alongside other taxes”.

The Chancellor used her Mais lecture to set out how the government will pursue the three biggest opportunities for economic growth in Britian - a closer and more stable economic relationship with the EU, a step change in AI and frontier technology, and unlocking growth in every region and nation of the UK. 

Emily Stubbs (pictured), head of policy at the GBCC, said: “Businesses across Greater Birmingham will welcome the Chancellor’s focus on regional growth and a more stable trading relationship with the EU. 

"For a region as internationally connected as the West Midlands, reducing trade barriers and restoring predictability with our largest export market is essential to unlock the full potential of local businesses.

"The ambition to make the UK the fastest AI adopter in the G7 should also be applauded, and this is something the GBCC are proud to support through initiatives including the AI Academy and our Business Growth Studio.

“Greater fiscal flexibility presents a significant opportunity for the region. 

“Allowing Mayors and Combined Authorities to retain and direct a proportion of locally generated income tax could enable more strategic investment in skills, infrastructure and trade support here in the West Midlands.

“Commitments to support innovation and pull back on unnecessary regulation will also be welcomed.

“However, after years of uncertainty and the publication of several strategic plans, delivery on all of these commitments will be key to driving productivity and prosperity.”