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| Version 0 | Version 1 |
|---|---|
| George Osborne: Councils to keep £26bn business rates | George Osborne: Councils to keep £26bn business rates |
| (about 1 hour later) | |
| Local councils across England will be able to keep all proceeds from business rates raised in their area under new plans unveiled by the chancellor. | Local councils across England will be able to keep all proceeds from business rates raised in their area under new plans unveiled by the chancellor. |
| George Osborne told the Conservative Party conference the move would see £26bn diverted from central government to local government. | George Osborne told the Conservative Party conference the move would see £26bn diverted from central government to local government. |
| He called it the "biggest transfer of power to local government" in recent history. | He called it the "biggest transfer of power to local government" in recent history. |
| Councils will be able to cut taxes to help local businesses grow. | |
| The Government put the business rates regime, which dates back to 1988, under review in December. | |
| 'Devolution revolution' | |
| Mr Osborne said the change, in place by 2020, would mean cities and communities no longer had to go to the government "with a begging bowl". | |
| He said: "All £26bn of business rates will be kept by councils rather than being sent back to Whitehall." | He said: "All £26bn of business rates will be kept by councils rather than being sent back to Whitehall." |
| Shops, offices, factories and other small and medium businesses currently pay a uniform business rate set by central government. | |
| Councils collect the tax and send the funds to central government, although from 2013 they have been able to keep up to half. | |
| The Chancellor said the new system, which he called a "devolution revolution", would allow councils to lower rates "if they can afford it". | |
| He said to councils: "Attract a business, and you attract more money. Regenerate a high street, and you'll reap the benefits. Grow your area, and you'll grow your revenue too." | |
| Only cities with elected mayors would be able to raise the rates to pay for local infrastructure. They could increase the rates by up to 2% and would need to win the backing of local businesses. | |
| 'Business approval' | |
| Matthew Hancock, a cabinet office minister, said the change would not bring back the rises of the 1980s, when councils were free to set their own rates. | |
| He told the BBC that cities with elected mayors could only raise the rates "with the consent of the local business community". | |
| The Treasury said the current grant, which distributes the rates back to councils from central government, would be scrapped by 2020. | |
| A spokesman said there would be a "safety net" for any area where business rate receipts fell by 7.5%. |