YORK Conservatives have welcomed an announcement from the Chancellor that local councils will be allowed to set their own business rates.

George Osborne told the Conservative party conference in Manchester yesterday that he would phase out the local government grant and let councils keep their own business rates instead, and hailed the chance as "the biggest transfer of power to local government in living memory".

Cllr Chris Steward, the Conservative leader of City of York Council, said: "This is excellent news for York, which is well-placed to benefit from its healthy city economy.

"As the chancellor has said, the government currently collects more in business rates than it gives back in local grants. The system of the government of the day collecting local taxes and then recycling the same money back to local councils- minus a substantial 'handling charge'- is both wasteful and paternalistic.

"When this new system is established, local councils will be able to cut business rates as much or as little as they like - it will be up to them to judge -and to keep the income they collect. To put this in perspective, local councils will be able to keep up to £26 billion which currently goes to up to Whitehall and back again.

He added: "The CYC Conservative Group looks enthusiastically towards the day when York can set its own rates and keep the proceeds in line with its own economic agenda and we look forward to further details on this exciting plan."