Tory mayor Lord Houchen wants to offer a rebate, but the prime minister says it should be reinvested in communities.

The government is facing criticism over its plan to allow regional mayors to keep a share of income tax and business rates in England. Andy Burnham says that the proposals, expected to be phased in from next April, will give metro mayors powers to invest the money in their communities for public services. The prime minister said on Friday that this amounted to "the biggest shift of power out of Whitehall and Westminster" to regions across the UK. But Lord Houchen, the Conservative mayor of Tees Valley, argues he should be able to offer taxpayers a rebate instead, while opposition parties say the plans could lead to areas with weaker economies losing out. "The prime minister has said he wants to alleviate the cost of living [crisis] and give people room to breathe - what better way to do that than allow them to keep more of their own money?" the Tory mayor told BBC Radio 4's World at One. First Secretary of State Louise Haigh told the BBC that there was not currently a mechanism in place for mayors to offer a rebate. But Lord Houchen said it was "not beyond the wit of man" to create a system, adding it would not be "overly complicated" and would not be particularly controversial. "I think the prime minister and what this government is doing on fiscal devolution is a move in the right direction, but for it to be real devolution we've got to have local decision-making and choose what's best for the people we represent."