Business rates rises will be capped at 2% from next April, chancellor George Osborne declared in today’s autumn statement.
The widely anticipated move was announced in a package of relief measures for the high street, including a business rates discount for firms moving into empty shops.
Outlining plans to help small businesses hit especially hard by the recession and by “the rising challenge from the internet”, the chancellor announced a reoccupation relief plan: “To get the vacant shops that blight too many town centres to open again, I am introducing a new reoccupation relief that will halve the rates for new occupants.”
Companies on premises with a rateable value of up to £50,000 will get £1,000 off their bills, and businesses will also have the option of paying their rates in 12 monthly instalments.
But campaigners pushing for a wholesale reform of the business rates system will be disappointed to hear that a review of the system will not be considered until 2017.
In other measures, the chancellor cancelled the planned fuel duty rise next year, saying: “Going green does not have to cost the earth.”
Elsewhere, Osborne outlined borrowing targets for the next five years, forecast a budget surplus by 2018-19, and announced a new round of £3bn cuts to government departments over the next two years. As expected, the government also revealed plans to raise the state pension age to 68 in the late 2030s and 69 in the late 2040s.
“Britain’s economic plan is working but the job is not done. We need to secure the economy for the long term,” said the chancellor. “We want a responsible recovery.”
In response, shadow chancellor Ed Balls accused the government of failing to grapple with “the cost of living crisis”. “For most people in this country living standards aren’t rising, they are falling year on year.”
The BRC, which has campaigned extensively on business rates, broadly welcomed the statement. “The chancellor has recognised that businesses are suffering and is right to listen to retailers’ concerns on business rates,” said the BRC’s director general Helen Dickinson. “The BRC has campaigned for a 2% cap, and reform of the business rates system, and it is extremely welcome to hear it announced.”
Referring to government plans to remove employer national insurance contributions on young people under the age of 21, Dickinson added: “Forty percent of all jobs for those under 20 are in retail, and this will help retailers provide secure career opportunities for young people.”
ACS CEO James Lowman said: “The proposed cut in business rates is fantastic news, helping the vast majority of convenience store operators. This will help businesses to make investments in the next two years.”
The British Council of Shopping Centres also welcomed the moves, calling it a “good start”. “This reform is a strong statement by the Conservatives that they support Britain’s town centres and are willing to listen to British business to fix the problem. We hope that we can build on this momentum moving forward,” said Edward Cooke, director of policy.