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The region must now throw its weight behind creating a Midlands Powerhouse driven by a combined authority, business leaders said following the .

Chancellor George Osborne made another monumental step forward in devolution to Greater Manchester by announcing it’s authority could keep all growth in business rates in its own region.

Greater Birmingham Chambers of Commerce said that the Chancellor gave the biggest hint yet that Birmingham must emulate Greater Manchester by creating an authority that represents the real economy of the region.

Mr Osborne described an agreement with Greater Manchester on an elected mayor as “the most exciting development in civic leadership for a generation”, adding: “We have now reached provisional agreement to allow Greater Manchester to keep 100 per cent of the additional growth in local business rates as we build up the Northern Powerhouse.”

Birmingham Chamber president Greg Lowson said: “This is the biggest hint yet that Greater Birmingham and the surrounding region must get its act together and create an authority that can speak for the wider economy.

“Only then can the West Midlands begin to enjoy that same sort of treatment the Government has given to Greater Manchester.

“He also announced that Northern Ireland is to be given greater powers to set corporation tax. Since the West Midlands has a greater economic output than Northern Ireland there is a strong case for our region to have greater control of its tax affairs.

“The Chamber has called for a reform of business rates and we have worked with the Treasury to this end ahead of its review this week so we welcome the Chancellor’s comment that the business rate system needs far-reaching reforms.

“Mr Osborne’s announcement that he will abolish annual tax returns and allow businesses to handle their affairs on line at any time during the year will a massive time-saver for already-stretched SMEs

“Doubling support for companies exporting to China will be particularly welcomed. The West Midlands is the only region in the º£½ÇÊÓƵ to have a positive trade balance with China and º£½ÇÊÓƵ Trade and Investment, based at the Chamber, deserve credit for helping businesses to export.

“The Chancellor rightly praised the Midlands for creating a new job every 15 minutes and we know from our own surveys that many of those are Chamber members.”