The Chancellor’s last minute decision not to increase business rates by 5% on 1 st April is good news for beleaguered retailers and a major victory for British Retail Consortium (BRC) campaigning.

The increase will be limited to 2% but the remaining 3% rise has not been scrapped. Businesses are simply being given the option of spreading it over the next two years

Stephen Robertson, BRC’s director-general said the announcement is welcome Government recognition that these are tough times for retailers and a good first response to the concerns the BRC has been putting to Government over the last six months. But retailers still face a £100m increase to their bills from 1 st April and there has been no change to the overall £1.6bn increase in business rates bill retailers face by 2010/11.

Robertson said “It’s come at the last minute but the Government’s recognition that piling on a massive extra £250m business rates burden in a recession would seriously harm hard-pressed retailers. With RPI inflation at zero, and expected to turn negative later this year, a five per cent increase was unjustifiable.

“Allowing businesses to postpone the extra costs from ending phasing in of the 2005 revaluation scheme will be particularly helpful for smaller retailers. Many were struggling to prepare for a painful hit from increases over and above the basic 5% planned. But the Chancellor has only taken a first step. The timing has changed but the eventual costs haven’t. He still plans business rates increase totalling £1.6bn by 2010/11, that’s 30% extra.

“The Government must reintroduce empty property rates relief and remove the serious threats that remain from the impact of 2010 revaluation and Business Rates Supplements.”