BRITAIN’S struggling high streets were handed some relief yesterday after the government gave in to calls from industry leaders to cap the rise in business rates next year.
George Osborne has cut the rise in rates, due to come into force next April, to two per cent instead of the planned 3.2 per cent rise linked to September’s Retail Prices Index measure of inflation.
He also pledged to resolve 95 per cent of outstanding rates appeals by 2015 and extended the small business rate relief scheme for one year beyond 2014.
Businesses will also be entitled to spread their business rates payments over 12 months rather than 10 months to help with cash flow.
The British Retail Consortium, which has lobbied for a rates cap after, welcomed the changes and said the cap on its own would help retailers release an additional £90m into the UK economy next year.
But retailers would still like to see a wider root-and-branch review of business rates, which have escalated from £5.5bn in 2007 to over £7bn in 2012.
Osborne hinted at a reform of the system in 2017, promising to “discuss with business options for longer-term administrative reform”.
Sainsbury’s, a long-standing critic of the current system welcomed the changes but added: “An urgent rethink of business rates policy is required in order to level the playing field between traditional retailers and online players if we are to avoid an irreversible decline in our towns and high streets.”