Ministers have claimed business rate reforms – which would allow councils to keep half the levies they collect – could boost the national economy by £10bn over the next seven years.

The forecast is contained within documents published by the Department for Communities and Local Government yesterday, in advance of next week's third reading of the Local Government Finance Bill in the House of Commons.

Under the proposals, growth in business rate yields would be split evenly between central and local government – with the ‘local share' held in full by councils and the ‘central share' redistributed in grants to local government.