Local councils to set and keep business rates

He adds, ‘The new system unveiled by the Chancellor at the Conservative Party Conference is an interesting and bold move.


Scottish councils have called for business rates to be further localised after George Osborne announced that English authorities will be allowed to keep rates totalling £26 billion.

However, contractors may be more interested to learn that councils will gain the power to lower the rate of business taxation in their area to, which could potentially have a major impact on small businesses and self-employed people.

He said: “I am embarking on the biggest transfer of power to our local government in living memory”.

“It’s time to face facts”, he said. The way this country is run is broken.

“This new Commission is welcome but we must not duck the important infrastructure decisions that need taking now, particularly on expanding aviation capacity in the South East”.

“Our cities held back”.

“There’s no incentive to promote local enterprise”.

“The idea of us all being in this together, is undermined every time the Chancellor takes from Northern authorities and gives to those in the South, widening not narrowing the North South gap”. So this is what our plan means. Success will come to those areas that can readily differentiate themselves from their competitors and really attract and support business growth. They will be accountable for their choices and whether their choices result in more or fewer windows on their high streets being boarded up.

Croydon’s Labour council leader has warned that devolution measures proposed by Chancellor George Osborne could leave the council “hopping around on one leg with our hands tied behind our back”.

Normally the money – a levy on businesses depending on where they are and the value of the land they occupy – is collected locally but then shared out from the centre around the country.

Under the plans, councils will also be able to cut taxes, or raise them if local firms agree.

Currently, business rates provide the Treasury with £26bn a year. It is hugely important that local councils can set and keep their own rates, it will support the regeneration in the area. Now only 50 per cent is retained locally.

“The business vote to approve any increases is a welcome concept, though we have as yet no detail on this proposal”.

It means towns and cities will be encouraged to compete with each other by cutting tax rates, in a bid to attract employers into their area.


The central government presently sets a uniform business rate for shops, offices, factories and businesses to pay.

Updating infrastructure is key to sustainable growth and productivity CBI boss John Cridland