local hope for business rates

Ministers will consider the idea – which many in local government have long campaigned for – in the hope it would encourage councils to grow their economies.

Business Secretary Vince Cable said it would set councils “free from dependency on central funding” but promised firms protection against huge rises in business rates.

He said measures would be considered to ensure areas with a smaller number of businesses were not unduly hit.

Money from London boroughs could be dished out to the rest of the country, for example.

At the moment, business rates are set by Government but collected by councils.

The money is then sent to a Treasury pot to be redistributed according to Government formulas.