MINISTERS paid lip-service to pressure for greater devolution yesterday, foisting the unpopular directly elected mayor system on Greater Manchester.

As part of Chancellor George Osborne’s so-called “northern powerhouse” plan, central government will relinquish control over £1 billion’s worth of spending to the 10 councils in Greater Manchester.

But in return, the city will get a “Boris Johnson-style” mayor, something rejected by voters in central Manchester in May 2012.

And Labour warned the pre-election announcement still left towns and cities across Britain “feeling the pain of the longest cost of living crisis in a century.”

The Institute for Public Policy Research welcomed the move to give Greater Manchester “significant new powers over economic development and control over billions of pounds of public funding.”

Director Ed Cox said: “Not only will it get London-style powers over housing, transport and policing but there are some big deals on skills, welfare to work, and health and social care.”

Labour shadow local government secretary Hilary Benn warned against falling for the Tory claim that “everything has been fixed and the country is on the right track.”

He said: “David Cameron and George Osborne have also hit the areas of the country with greatest need, including our major cities, with some of the biggest spending reductions while a handful of the wealthiest local authorities have been given more money to spend.

“Only Labour is offering devolution, financial reform and a fair deal for England.”

Mr Benn lauded Labour plans for an English Devolution Act and transfer of £30bn from Whitehall to cities and regions.

Labour leader Ed Miliband has also proposed abolishing the House of Lords in favour of an elected chamber made up of Britain’s regions and nations.

Devolution campaign the Hannah Mitchell Foundation welcomed the Labour’s proposals.

Foundation chairman Barry Winter said: “At a time when trust in politicians is at an all-time low, this represents a welcome radical element in Labour’s devolution agenda which offers a way of creating a new kind of politics.”