THE Scottish Government should follow the Chancellor’s lead and let councils keep the business rates they raise according to the leader of Glasgow City Council.

George Osborne announced at the Tory Party conference councils in England would no longer hand over their business rates to the Treasury and get a share allocated back to them in a grant.

Instead he said they would keep what they raise to invest in jobs and growth.

Previous council leaders in the city have asked for the Scottish Government to allow it to keep the business rates it collects.

The council said the current arrangements where cash is collected and paid to the Scottish Government who then allocate it around the 32 councils, costs the city tens of millions in cash a year.

The Scottish Government said councils already keep what they collect, but business and council leaders have said it is clawed back in a “compensatory reduction” in the block grant” which has been described by the chief executive of Glasgow Chamber of Commerce as “jiggery-pokery”.

Council leader Frank McAveety, said more power over income raising was necessary for councils to boost the local economy.

He said: “This announcement is something that we as a City Council have long called for and we welcome the Chancellor’s announcement today. However, the benefit of this will only be felt by our sister cities in the rest of the UK and not in Glasgow or the rest of Scotland.

“Glasgow has long said that giving cities greater ability to amend and set their income is a crucial next step in empowering cities and city regions to achieve their full potential as the main drivers of economic growth.

“Such investment is necessary to develop local economies and we will continue to make calls to the Scottish Government for the devolution of similar powers to Scottish cities. “

The Chancellor said his policy was a “devolution revolution” which he said was delivering “power to the people”.

A Scottish Government spokesman said: “Scotland already has the most competitive business tax environment in the UK and the Chancellor’s proposals today will not change that.

“Scottish councils already retain all of the business rates they collect and the power to reduce business rates bills is being devolved this month.

“In contrast to UK Government funding of English councils, the Scottish Government has treated councils very fairly, with a total settlement this year of over £10.85 billion.”