George Osborne’s plans to allow local councils to set their own business rates and keep all the money they raise have been met with a lukewarm response in Cumbria.

The described his plans as “the biggest transfer of power to our local government in living memory” at the Conservative conference today.

Mr Osborne announced that all all income generated from business rates will now be kept by local councils, as opposed to being sent back to the government before being redistributed as it is now.

The news is of particular interest in Cumbria, where a survey earlier this year found that Sellafield paid £32 million in rates annually, higher than the five highest rate payers in the City of London, but it is unclear how Osborne’s plans would deal with such anomalies.

In his speech Mr Osborne set out the benefits for councils: “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.”

South Lakeland District Council Leader Councillor Peter Thornton gave the idea a cautious welcome. “While we welcome this announcement in principle, as ever with these things the devil can sometimes be in the detail, so we will await further clarification on how this will work with great interest. “What councils really need more than anything else is some certainty about how our finances are worked out. At the moment having to wait for an announcement each December makes life very difficult for us trying to plan our finances and budgets. No business would be expected to work like that, so why should local councils?’’

in-Cumbria contacted the other district councils who all said they were waiting for more details before commenting.

The current business rates system dates back over 400 years, and they are calculated according to to the rental value of the property used by a company.

This has led to claims that the system unfairly punishes high street stores with large premises, while being too lenient on online only retailers who only require very small premises.

Osborne also reiterated his commitment to the Northern Powerhouse and announced the establishment of a National Infrastructure Commission which will drive forward major projects such as roads, railways, airports and power stations that require planning and construction over a period of decades.

Rob Johnston, chief executive of Cumbria Chamber of Commerce, is waiting to find out how the infrastructure promises will be fulfilled.

He said: “The Chancellor set out a commitment to improving infrastructure competitiveness, which we applaud, and we welcome the appointment of Lord Adonis.

“But he needs to demonstrate how they’re going to fix the problem.”

But Mr Johnston is nervous about any premium on business rates.

He added: “We are concerned that he has chosen to announce major changes on business rates without any consultation with the businesses that pay them.”

Simon Walker, Director General of the Institute of Directors, said: “Businesses are excited about the prospects for devolution, and the promise to devolve business rates will give local authorities a greater stake in the success of their local economy.

"Businesses have been clear that they want enterprise to be put at the heart of the devolution agenda, and the Chancellor appears to be doing just that.

"More than 60 per cent of IoD members back local politicians being given the power to set business rates.

“We hope this new deal will pave the way for councils to use these new powers to attract businesses and regenerate high-streets. 

He added: "More than half of IoD members were concerned devolution would lead to higher taxes. Councils must avoid the temptation to increase rates to raise revenues, and instead compete to attract businesses to the area, which will bring jobs and wealth.”