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Osborne to offer tax powers to big cities

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George Osborne announced last week a law offering the other big cities of England new powers provided they adopt an elected metro-mayor, similar to Manchester.

David Brookes of BDO said: ‘Devolution of taxing powers to big cities will not be as broad ranging as Scottish devolution and the taxes likely to be devolved are SDLT and council tax rather than income tax, corporation tax or VAT... but would allow them to react to local economic conditions and, in the case of SDLT, local property prices. As more cities obtain these taxing and spending powers it will be interesting to see whether cities begin to compete with each other on setting tax rates and whether they will direct the funds they raise to attract businesses and encourage start-ups or focus on local residents.’