Former Labour Transport Secretary Lord Adonis will chair National

“Provided they have the support of the local business community, these mayors will be able to add a premium to the rates to pay for new infrastructure and build for their cities’ future”.

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The system under which cash raised from rates is sent to Whitehall to be redistributed in grants to town halls around the country is to be abolished, along with the uniform business rate which imposes a single tax rate on every council.

The plans, the most signifiant overhaul of local government funding in a generation, will see the axing of the core grant now received from the Westminster government with councils instead keeping all of the business rates collected in their area.

In his speech Mr Osborne set out the benefits for councils: “Attract a business, and you attract more money”.

The government also plans to introduce a “safety net” for any area where business rate receipts fall by 7.5%.

It (Other OTC: ITGL – news) is an agenda which will match the devolution of powers over welfare, business support and the NHS to localities such as Greater Manchester.

Meanwhile, John Cridland, director-general, of the Confederation of British Industry (CBI), the UK’s biggest business lobby group, said the “devil would be in the detail”.

He said latest figures showed the biggest growth in revenue from business rates was in the East Midlands and Yorkshire.

He went on: “So this is what our plan means”.

According to the Chancellor, it means councils will have an incentive to help their local economy grow.

However all local authorities across Yorkshire will be able to slash them, potentially sparking fierce inter-regional competition for business.

The government put the business rates regime, which dates back to 1988, under review in December. He added that the move was a “devolution revolution”. We need to be sure that councils are able to retain any increased revenues over time. The newly announced National Infrastructure Commission is the right platform to deliver long term projects.

The Chancellor said today, however: “Some people question our commitment to the aid budget but with millions fleeing warzones, and a crisis in Europe, I’m not prepared to cut it”.

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“Pooling local pension schemes will create the scale needed to invest in infrastructure, which due to their long-term nature and stability can make sound investments for pension funds”.

Chancellor of the Exchequer George Osborne