Andy Burnham is facing a furious backlash today after he moved to block a Tory mayor's plan to give local residents a tax rebate under new powers.The Prime Minister announced on Friday that England's regional mayors will be allowed to keep a share of income tax and business rates collected in their area.He described the proposals as 'the biggest shift of power out of Whitehall and Westminster' to regions across the UK.Mr Burnham has sold the idea as a means of giving mayors greater ability to increase investment in local infrastructure and public services in order to boost regional growth.But he prompted a row by shutting down proposals from Tees Valley mayor Ben Houchen, who wanted to use the new freedoms to instead ease the tax burden on households in his region.The Conservative politician was keen to create a rebate scheme to 'put money back into people's pockets and let families keep more of the money they earn'.Lord Houchen said he wanted to make his region 'a more attractive place and a more competitive place to invest in than Manchester and London'.Reform UK mayors Luke Campbell (Hull and East Yorkshire) and Andrea Jenkyns (Greater Lincolnshire) were also said to be exploring similar proposals.Andy Burnham is facing a furious backlash today after he moved to block a Tory mayor's plan to give local residents a tax rebate under new powers Tees Valley mayor Ben Houchen had set out plans to use new freedoms to create a rebate scheme to 'put money back into people's pockets'But the PM, who was mayor of Greater Manchester for about nine years, dismissed those plans and said he would not be comfortable with regional mayors using devolved funding to cut taxes.'This is not about making them mini-chancellors of the exchequer, undermining or rewriting policy on tax and personal finance,' Mr Burnham said.'This is a policy for growth and investment. It's a very clear policy of the kind that Greater Manchester has benefitted from over the last decade where if you get more growth in your economy, you're given an incentive to do that because you can keep more of the proceeds of that to then keep investing and keep the growth going.'You can't just get a little bit of growth and then abandon the investment, because then you won't grow. It's a growth policy.' Healey will set out first Budget of Burnham premiership on 28 Oct John Healey will deliver his first Budget as Chancellor on October 28, pledging to move 'money and power out of Westminster'.Announcing the date of the Budget on Friday, Mr Healey promised plans would be 'built on fiscal discipline'.He said the Budget would 'meet our fiscal rules' and 'give businesses and families some of the stability they need to plan for the future'.Looking back at Andy Burnham's first two weeks as Prime Minister, Mr Healey said the new Government was 'working fast to restore hope and back Britain's communities' and had 'begun to kickstart growth in every postcode'.But he will face significant challenges as he finds more money for Mr Burnham's devolution priorities and increased defence spending amid warnings the Iran war will further squeeze the public finances.Experts have warned Mr Healey that he will need to either raise taxes or cut spending elsewhere as pressure on the public finances has left no room for extra borrowing.The National Institute of Economic and Social Research (Niesr) said on Wednesday the ongoing conflict in Iran would mean more persistent inflation and higher interest rates. In response to the Government blocking his plans, Lord Houchen said: 'So devolution means getting people's taxes to spend but not being allowed to give it back to them.'Last time I spoke to the PM, devolution was about Whitehall not dictating what areas can or can't do. Doesn't sound much like devolution to me? Just an excuse for a tax grab.'They want to reward mayors for growing the economy but the best way to grow the economy is to let people keep more of what they earn.'James Cleverly, the Tory shadow local government secretary, said: 'This is the hypocrisy of Labour's top-down devolution agenda laid bare.'Labour say they want to empower local communities, but instead, ministers in Whitehall are telling local leaders what they can and can't spend their money on.'They are blocking tax cuts while slashing funding for councils with low tax rates, trying to force them to hike bills if they want to keep services going.'Labour want to impose their high-tax model across England.'Under Mr Burnham's plans, the share of taxes will only be given to areas which have regional mayors, which include Greater Manchester, the Liverpool City Region, Cambridgeshire and Peterborough and South Yorkshire.They have powers over issues such as transport, skills and infrastructure planning.Details of the reforms – including what proportion of taxes the local leaders will keep – are expected to be announced in a white paper, published when Chancellor John Healey presents his first Budget on 28 October.The rate of income tax that billpayers face will not change as a direct result of the reforms, according to the Government.Ministers will retain an equalisation system, so areas where less tax is collected continue to receive financial support.The PM's top Cabinet ally has also earlier moved to shut down Mr Houchen's proposals.'I'm not convinced that it would be possible for him to set up a rebate scheme,' Louise Haigh, who is Mr Burnham's de facto deputy as First Secretary of State, told Times Radio on Friday morning.'We'd have to see the details of that, but it certainly isn't possible at the moment. Those kind of schemes necessitate HMRC to set up full schemes, that's just not possible at the moment.'The way that the mayors are set up and work is to reinvest the money into their public services, into their local economies. It's not possible at the moment.'We'd have to see, obviously, plans and a scheme put forward by Ben Houchen, but that's not how these powers and resources are intended to be used.'Earlier this week, Mr Houchen had revealed he was in discussions with the Treasury over how best to structure his planned tax relief.'Every mayor is backing fiscal devolution because they want more money to spend in their area,' he told The Times.'However, if the Tees Valley is handed a slice of local income tax and business rates generated locally, I'll create a new rebate scheme to put money back into people's pockets and let families keep more of the money they earn.'Fiscal devolution must be about giving places like Teesside the power to do things differently, back growth and reward the people that drive our local economy instead of squeezing every last penny out of them.'