Speaking at the Conservative party conference, Chancellor George Osborne promised a “devolution revolution” giving councils the freedom to keep the £26bn in business rate income at a local level as well as being able to cut the level of the rates.

Osborne said: “Today I am embarking on the biggest transfer of power to our local government in living memory. We’re going to allow local government to keep the rates they collect from business. That’s right, all £26bn of business rates will be kept by councils instead of being sent up to Whitehall.”

In response to these plans a spokesperson from the British Retail Consortium spokesperson said: “We look forward to learning more about the Chancellor’s plans to fundamentally reform the business rates system in the autumn. Today’s announcement only highlights the urgency of reforming this outmoded tax which acts as a drag on the economy.

“We will now look closely at the detail as it emerges but it’s worth remembering that there is a widespread consensus that any package of reform to the system must address head on the need to reduce the burden of a tax that discourages investment in jobs and growth.

“The national business rates multiplier needs to be frozen, and then reduced to encourage local and national growth.

“The detail of the Chancellor’s plan and on-going review is now absolutely essential.”