George Osborne Hails Devolution Revolution

The Chancellor has announced a radical devolution of business rates to local councils as the centrepiece of his speech to the Conservative Party conference in Manchester.

The uniform business rate set in Whitehall will be scrapped, and local councils will take control of the setting of the controversial levy.

Business rates reform has been a long battle for small businesses and retailers.

Rates are charged regardless of whether a business is profitable or not, unlike corporation tax.

During the financial crisis, many thousands of businesses were ultimately pushed into bankruptcy because of business rates bills.

In theory, councils could now compete with lower rates to attract business, or fund better council services with higher rates.

It is an agenda which will match the devolution of powers over welfare, business support and the NHS to areas such as Greater Manchester.

Announcing the shake-up, Mr Osborne repeatedly claimed the Tories were "the builders" and "the only true party of labour".

He dismissed Jeremy Corbyn's Labour party as "wreckers" arguing they had "completely abandoned" working people as they lurched "off to the fringes of the left".

Mr Osborne also confirmed in his speech the setting up of a new independent body, led by former Labour cabinet minister Lord Adonis, to "shake Britain out of its inertia" and help push forward major long-term building projects such as roads, railways, airports and power stations.

And he said he would create British Wealth Funds to encourage local government pension funds to invest in infrastructure.

The Chancellor, who is tipped as a future Tory leader, said the handing over £26bn of business rates to councils represented "the biggest transfer of power to our local government in living memory".

He said: "It's time to face facts. The way this country is run is broken. People feel remote from decisions that affect them. Initiative is suffocated. Our cities held back.

"There's no incentive to promote local enterprise. It's time we fixed it."

He went on: "So this is what our plan means.

"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."

Mr Osborne said: "Money raised locally, spent locally. Every council able to cut business taxes.

"A new way to govern our country. Power to the people. Let the devolution revolution begin."

He also sought to appeal beyond core Tory supporters to disaffected Labour voters, describing the Conservatives as "the party of work".

The Chancellor said: "My message to today's Labour Party is this: You head back to the 1980s. We're heading forward.

"You listen to the few. We'll govern for the many."

And he defended cuts to benefits for low-income households, which is a source of concern for a number of backbench Tory MPs

"We simply can't subsidise incomes with ever-higher welfare and tax credit bills the country can't afford," said Mr Osborne.

But he said in return, there would be new apprenticeships, lower income taxes and higher wages.