GEORGE Osbourne’s decision to allow council’s to keep the proceeds from business rates has been welcomed by the Leader of Cheshire East Council.

The Chancellor of the Exchequer made the announcement at the Conservative Party conference in Manchester on Monday, October 5.

Councils will also be able to cut the rate and some will be able to raise it.

Mr Osborne, MP for Tatton, said councils would hold on to £26 billion, calling it the ‘biggest transfer of power’ in recent history.

They currently keep up to 50 per cent of the rates with the rest going to Westminster.

Cllr Michael Jones, leader of Cheshire East Council, said: “This is excellent news and something we have been seeking for some time.

“It means pro-business councils like Cheshire East get to keep more of the business rates that they generate locally – and work hard to attract – and invest it in our local communities.

“It will be a virtuous circle and we can only gain from this arrangement.

“Cheshire East Council has the largest number of small and medium sized businesses in the north west and contributes significantly as one of the economic powerhouses of the north and for the UK.

“This announcement will help us to build on this success and invest even more into the local economy and continue to put our residents first.”

Mr Osborne said the change, due to be in place by 2020, would mean cities and communities no longer have to go to the Government ‘with a begging bowl’.

Central government currently takes in about £11.5 billon in business rates nationally and redistributes £9.4 billion in grants.

Cheshire East currently collects around £130 million in business rates and keeps just 27 per cent – around £40 million.

The council receives formula grant from government totalling £50 million plus around £30 million of other grants.

The change announced could mean circa £5 million-£10 million of new financial benefit to east Cheshire.

Cheshire East Council and Greater Manchester Combined Authority are already part of a government pilot scheme for full retention of business rates growth that began on April 1, 2015.

Cllr Jones added: “We have been delighted to be at the forefront of the Chancellor’s pilot scheme to encourage and incentivise growth in local businesses and work alongside Greater Manchester to trial this.

“We embrace innovation and greater devolution of power to the regions and local authorities and have a strong commitment to delivering economic growth and prosperity for Cheshire East.

“This initiative will help to attract further investment, jobs and opportunities for the people who live and work here.

“This will become all the more important as we move towards more devolved government.

“Cheshire East is at the forefront of helping to drive economic growth, job creation and business confidence in the north west.”