South Hams Council is planning to offer tax breaks to businesses in a bid to bring new jobs to the district – and stop existing employers from moving out.

The district is already losing important employers to neighbouring local authority areas, such as Plymouth, where they can get a better deal, councillors were told.

Now South Hams councillors aim to be able to offer the same incentives to new and existing businesses that their neighbours can already offer.

That means offering companies discounts on their business rates that could see some companies’ business rate bills significantly slashed, members of the district council’s executive were told.

Council leader John Tucker said: ‘We need to approve this policy and implement it to make sure that businesses stay in the South Hams.

‘In the past we have seen them move out to places, like Plymouth, within a mile of our boundary.’

The councillor made it clear that the tax breaks would be aimed at new businesses thinking of moving to the South Hams or growing businesses which might be thinking of moving out – not hard-up businesses looking for a helping hand.

There is already a system in place to support ailing businesses with help with their business rates, said Cllr Michael Hicks.

‘This is to help good businesses on the way up and not to bail out businesses on the way down,’ he told councillors.

He added: ‘This will deal with only special cases that are quite rare.’

The council to set up a special panel to look at the case for any company getting a business rate discount.

A report to the councillors said: ‘The purpose of these new powers is to give billing authorities the ability and scope to encourage, sustain and improve local economic performance by temporarily lowering the business rate burden while local businesses grow and create significant additional employment or safeguard jobs within the district.’

But the report made it clear that the council discretion over business rates in such situation would only be used ‘in exceptional circumstances’.

Half the business rates collected across the district is handed over to the Govern­ment while nine per cent goes to Devon County Council and one per cent to the fire authority.

South Hams Council gets to put the 40 per cent that is left into its own coffers.

The report warned councillors: ‘Members could opt to do nothing – however, this could realistically result in local businesses opting to move and expand their operations outside the district.

‘Such a move could result in local job losses, vacant property and eventual reduction in the business rate revenue.’