Birmingham should be allowed to set its own rate of VAT to boost the local economy, according to the city council.
The plea for control over “consumption taxes” was part of a submission to a government consultation into the powers a directly-elected mayor should receive.
But Birmingham City Council insisted in its response that the same powers should be granted whether the city chooses to create a mayor or not.
Referendums asking residents in Birmingham and Coventry whether they want to replace the existing systems of a council leader and cabinet with new directly elected mayors will be held on May 3.
And Ministers are next week expected to announce that elections for a mayor will take place on November 15, if residents vote “yes”, when a poll to elect a new police commissioner is already scheduled.
But the Government has admitted that referendums will take place with voters kept in the dark about the powers a mayor will actually receive.
It has promised to devolve “significant new powers and funding” to cities with mayors, and launched a consultation in November to ask existing council leaders, business leaders and others what those powers should be.
However, Ministers have now published their findings – and announced that they will simply open talks with a new mayor once they have been elected.
Local Government Minister Greg Clark said: “Where any mayors are elected in the 12 cities we will continue the bespoke approach to devolving powers that we are already pursuing in the context of city deals, but with the mayors themselves having an important role in the process of decentralising powers.”
Birmingham City Council, in its response to the consultation, called for a range of powers to be devolved to the city, adding: “It is the powers and freedoms that matter, not the specific system of governance we choose to adopt, so the comments in this paper should apply regardless of whether Birmingham is to have an elected mayor.”
These included the power to retain business rates, which are currently collected by the Treasury and then redistributed back to local authorities from Whitehall.
It also called for local discretion over consumption taxes “which can be introduced with the agreement of local business and provide for targeted economic gains”.
In the short term, the authority would like to introduce a “bed tax” on tourists staying in the city’s hotels of perhaps £1 a night, to help fund cultural and sporting events and bring creative industries to the city. In the longer term this could be expanded to include other taxes on consumption and existing taxes such as VAT, in agreement with local employers, a council official said.
The document also calls on the Government to give the council control over assets previously owned by the regional development agency, Advantage West Midlands, which will be abolished in June this year.
They include 23.1 hectares of land at Longbridge, and 3.04 hectares surrounding Edgbaston Cricket Ground.
As things stand, they have simply been handed over to the Homes and Communities Agency. Birmingham City Council also asked for a share of any money from the Government’s £2.4 billion regional growth fund, designed to create private-sector jobs, which is not allocated to employers.
The authority’s paper is a contrast to the submission from Coventry City Council, which focused on making the case against a mayor.
In their document, councillors complained: “Coventry City Council did not need to have a directly-elected mayor to rebuild the city after large parts of it was destroyed in the Second World War – it was work undertaken by dedicated local councillors working together who had the vision to plan a new city.”
A number of submissions to the government called on the mayor of Birmingham to enjoy a regional role. For example, Birmingham Chamber of Commerce told the Government that a mayor of Birmingham should co-chair the Greater Birmingham & Solihull Local Enterprise Partnership and chair Centro, the West Midlands Integrated Transport Authority.
But Centro itself, in its submission, warned that the leaders of other local authorities could not be excluded. Centro is responsible for Black Country towns and Wolverhampton, and Solihull, as well as Birmingham and Coventry.
The transport authority’s paper said: “Centro believes that in order for the West Midlands to achieve its economic potential for development and growth, the transport system needs to be planned and co-ordinated at the sub regional rather than the city level.”