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By Mithran Samuel ...
By Mithran Samuel

Gordon Brown will launch a consultation on plans to give councils the right to keep business rate gains from economic regeneration, in a speech to the Local Government Association conference today.*

He is expected to say that councils will be able to keep a capped proportion of gains in the rates above a baseline, set in accordance with the historic trend of economic growth in the area.

It is believed that the policy, which would be implemented in 2005, would raise around £1bn for English councils over three years.

The provision is included in the Local Government Bill but only in general terms, and the Treasury is looking to flesh out the policy through the consultation.

An LGA source said there were a number of issues to consider, for instance the method of setting the baseline and cap, but said it was a welcome move, particularly as the money would not be ring-fenced.

The current system of business rates - national non-domestic rates - was introduced in 1990, prior to which councils set their own levels and kept all of the money they collected.


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