Northern cities 'should lead devolution' in the UK

Localism in England should be about devolving power to the lowest appropriate level - down to councils, to neighbourhoods and to individuals, Communities Secretary Eric Pickles said, after a report suggested that Manchester should lead the way on devolution in the UK.

Mr Pickles said: "There may be some role for combined authorities on a strategic level to promote economic development and transport, but there is a real risk they will suck power upwards away from local councils and local taxpayers.

"Nor should localism be a fig leaf for hitting hard-working people with a new range of municipal stealth taxes. Creating new taxes, more politicians and new tiers of local administration is not the answer - the starting point should be increasing local democracy and local accountability."

• Read: Nick Clegg pushes for more decentralisation in England

English cities should be able to set its own taxes, the director of a think tank has suggested, calling for full devolution in Manchester.

Phillip Blond, of ResPublica, said:

• Read: Manchester 'should lead devolution' in the UK

Manchester should be given income-tax raising powers and complete control of spending within five years as a blueprint for granting full devolution to English cities, a think tank said.

Scotland's independence referendum - and the extensive new powers promised even in the event of a No vote - has refocused attention on local powers in the rest of the UK, including England.

ResPublica said a Greater Manchester Combined Authority, with an elected mayor and assembly as in London, should first be given power over property taxes and then income taxes and the right to reinvest savings to increase revenue.

The new authority would also be expected to commit to devolving further to localities within its area, according to the "Devo Max - Devo Manc" report.