Chancellor will use Budget to set out roadmap to fiscal devolution

The Chancellor used his first major speech on the UK economy to make clear that he intends to use next month's Budget to map out plans to transfer tax-raising and spending powers from central government to regional authorities.

John Healey focussed his speech at the Manufacturing Technology Centre on 7 September on describing how he aims to create investment, innovation and jobs.

Mr Healey told invited guests including West Midlands Mayor Richard Parker and Business Secretary Jonathan Reynolds: "That is why at the Budget I will set out a roadmap to fiscal devolution - a permanent transfer of power and resources from Whitehall to our regions, with greater business rates retention for local councils and strategic authorities.

"Grants from central government replaced by a share of local income tax for every Mayoral Strategic Authority beginning in 2028."

Mr Healey noted that London remains the UK's economic powerhouse.

But he added: "But if our city-regions could emulate the success of those in France or Germany, growth in our country would be transformed.

"In Britain, we also have our growth corridors - the Oxford-Cambridge Growth and the Northern Growth Corridor, where I can today announce a new allocation from the British Business Bank.

"£150m for scale-ups in the North – so that we get behind the most innovative and fast-growing firms.

"And I am also announcing the Northern 500: bringing the North’s most ambitious mid-sized businesses into a single growth community led by the Great North partnership of Mayors, led by the Mayors, supported by the private sector and by central government."

Mr Healey pledged that "across all nations of the UK, we will support local leaders to deliver local growth".

"Following in the footsteps of Richard Parker here in the West Midlands, I’m announcing today that South Yorkshire, Liverpool City Region, North-East England and Cardiff Capital Region will all become the latest Strategic Partners of the National Wealth Fund," he added.

"That means the National Wealth Fund will get hands-on. It’ll help these areas build their own investment pipelines.

"And, because I know that Strategic Authorities are only as strong as the Local Authorities that compose them, councillors in every nation will remain at the frontline of local growth - from housebuilding to high streets.

"Alongside this, we need a strong, strategic centre of government, wired to enable those local leaders and their ambitions - succeeding where old schemes like Levelling Up have failed."