Proposals to give councils the power to set and retain local business rates have been met with anxiety by business groups.

The government's White Paper on regional economic growth includes plans to allow councils to keep money collected from small businesses and plough it back into their communities where they see fit. Currently, business rates are collected locally and sent to central government before being redistributed nationally.

Secretary of State for Communities and Local Government Eric Pickles said the plans would create a fairer and more balanced approach.

However, business groups are not convinced. The Association of Convenience Stores public affairs director Shane Brennan is concerned about how money would be redistributed. "It's vital that small businesses are considered when it comes to the local management of business rates," he said

The Confederation of British Industry was worried about the "ambiguity" in the proposal. Deputy director-general John Cridland said the move could lead to varying and unknown levels of tax across the country.