The Government’s decision to raise London’s business rates may encourage companies to move elsewhere in the country, a Midlands commercial property expert claimed today.

And business property consultants John Truslove said more such financial engineering would not go amiss.

His comments follow a nationwide revaluation which should mean that most Midlands business rate bills in 2010/11 should fall or stay the same.

But London and the South-west could see savage increases.

The news has prompted outrage in the capital.

London First, the lobby group, said 20,000 businesses there would face a 30 per cent rise over two years, which was "unthinkable at a time of recession". Westminster City Council said average business rates in its area would rise 37 per cent by 2012-13.

The CBI, which pressed for a lower cap, said the increases were "worrying at this critical time for the economy".

But overall in the UK the majority of business rate bills – one million in total – will fall, according to the Government.

Mr Truslove described the announcement as “most welcome”.

He went on: “It redresses to a limited degree the north-south imbalance. It is said that some Home Counties rates bills will rise by over 100 per cent.

“It would be pleasing if the few remaining manufacturers in the West Midlands got a similar reduction.”

Mr Truslove said London and the South-east were the richest parts of the country and it was right that there should be a measure of “positive discrimination” in favour of the regions.

He added: “Businesses should be made to stop and think before setting up in the most crowded and economically prosperous part of the UK.

“If they insist on going to London and the South-east then they should expect to pay extra. That might then make them look twice at the attractions of the Midlands and elsewhere. The Midlands has a lot to offer being in the centre of England and with good transport connections north and south.

“It has been the hardest hit region in the recession and is crying out for inward investment.

“The economics of location need to be weighed more fairly.”

The Government stated: “London has seen the highest economic growth of any region, has the highest concentration of businesses, and makes a proportionate contribution through business rates.”

Of the overall position, it noted: “High street retailers will be largely unaffected, with sectors such as shops seeing potential cuts in rates bill – figures show an average one per cent reduction. However, large supermarkets are likely to see increases given their growth in property value since the last revaluation in 2005.

“The industry and manufacturing sector – from large factories down to small workshops and start up units – could see falls of three per cent.”

Ministers said 60 per cent of businesses across the country would see lower bills next year under the revenue-neutral revaluation, and a £2 billion relief scheme would phase in increases for the rest.

Local Government Minister Barbara Follett said: "Revaluation makes sure each business pays its fair contribution and no more – it will not raise a single extra penny.”

It was recently revealed that the gap between West Midlands economic output and the national average had widened from £10 billion to £15 billion pa.