Chancellor unveils ‘devolution revolution’ to drive jobs and local growth

Mr Osborne added: “Money raised locally, spent locally”.

“The abolition of the uniform business rate across the country means a reversion to the system that existed before 1990, where local authorities are able to set the tax rate on business property in their area independently”.

The Government has said if this had been enacted earlier Yorkshire and the East Midlands would have brought in a significant amount in revenue due to their substantial rates of business growth.

The plans are described as fiscally neutral.

George Osborne’s business rates revolution could be worth as much as £400m to Tyne and Wear. The way this country is run is broken.

“Our cities held back”.

The Chancellor today (5 October 2015) set out major plans to devolve new powers from Whitehall to local areas to promote growth and prosperity.

At the time, Tim Godfray, c.e.o of the BA. said: “Business rates are one of the key issues facing our members, so we are pleased to see that the coalition government accepts that the current business rates’ system, operating since 1988, needs fundamental reform”. At the same time, the core grant from Whitehall will be phased out, and local government will take on new responsibilities.

It is likely to win praise from lobby groups including the British Retail Consortium, which has long called for a radical change to the way rates are structured.

“In many families, grandparents play a central role in caring for their grandchildren and helping to keep down the costs of child care”, Mr Osborne said in the statement, released as the Tories gathered in Manchester, north-west England, for their annual conference.

“It was very disappointing that the Chancellor also had nothing to say to those people living in the real world who are seeing their tax credits cut by £1,300 a year, and who are struggling to pay sky high rents or are struggling to find enough work to get to the end of each month”. The Chancellor has agreed to devolve powers over areas including transport, housing, planning, policing and health for cities and regions that introduce directly elected mayors.

On the devolution of business rates, Simon Walker, Director General of the Institute of Directors, said: “Businesses are excited about the prospects for devolution, and the promise to devolve business rates will give local authorities a greater stake in the success of their local economy”.

He added: “Right now, we collect much more in business rates than we give back in the main grant”.