Give councils more powers to raise taxes, suggests Rayner

Telegraph

08-07-2025

Angela Rayner has suggested councils should be allowed greater powers to raise taxes.
The Local Government Secretary signalled support for fiscal devolution, where local authorities and mayors can levy their own local taxes and handle their own budgets.
It follows clamour from council leaders and councillors to be able to impose their levies, including a demand for a higher 'tourist tax' in Liverpool.
At the end of last year, Rachel Reeves, the Chancellor, resisted calls from English mayors to extend their ability to raise money at a local level.
But appearing before the housing, communities and local government select committee on Tuesday, Ms Rayner, who is also Deputy Prime Minister, appeared to be more supportive of the idea.
Asked about local authorities 'crying out' for more tax-and-spend powers, Ms Rayner said: 'I think the challenge is that it's always a bit 'evolution and revolution' and I definitely want to see more push.
'We have had that, to be fair. There is some more fiscal devolution coming to some of our pathfinder mayors, they're getting more control over their budgets.
'We're un-ringfencing huge sums of money to local government at the moment, which has never been done before. Councils get a pot of money and they're told how to spend it – I think that's deeply disrespectful.'
'Councils have found themselves in hot water'
Ms Rayner went on to declare she was 'challenging the system', adding: 'Everyone says about 'Westminster' but I like to think that actually if you empower local leaders [...] my style of leadership is that you get the best outcomes from that.
'The challenges are the same so I absolutely believe we should be pushing more. But equally the note of caution that comes our way as well is that sometimes where there have been the brakes taken off, for example in local government where audit was taken away, councils have found themselves in hot water.
'And therefore there has to be a balance, and some guardrails.'
Liverpool introduced a £2 tourist tax on hotel stays for overnight visitors in June, although Labour councillors in the city are pushing the Government to go further and allow them to extend the fee across the whole city.
Last year, The Telegraph revealed that individual ministers were in favour of introducing such a policy nationally.
In a private meeting with mayors in December, Ms Reeves was reported to have said that people were already paying enough tax in the wake of her first Budget.
She was also said to have expressed fears about the potential consequences of more fiscal devolution for the hospitality sector.