LONDON, March 17 (Reuters) – British finance minister Rachel Reeves said she was looking at ways to devolve more fiscal powers to different regions within the country, including some control of taxes, as part of efforts to drive growth and productivity.
Reeves said on Tuesday, in a speech in London’s financial district, that officials were working to “develop a roadmap for future fiscal devolution”, which would be published at this year’s budget.
“This will set out plans to give regional leaders controls of a share of some national taxes,” Reeves said.
The finance ministry said the roadmap would “look at income tax alongside other taxes”.
The poor economic performance of regions outside the capital has become an increasingly serious problem for Britain.
The vast majority of tax and spending decisions are taken in London, in contrast to other European countries where greater regional autonomy has produced less inequality between cities.
Giving regional mayors the control of some tax revenues absorbed by the Treasury could represent a major shift in Britain’s financial architecture, although the government has yet to say how far the reforms will go.
London’s share of the national economy has surged by over 3 percentage points since 2000 to 24%, at the expense of the vast majority of other British regions, according to official data.
Comparable data from the European Union statistics agency Eurostat show far less polarisation between regions in Germany and France.
(Writing by Andy Bruce in Manchester and Sarah Young in London, reporting by Muvija M and William Schomberg, editing by Catarina Demony)