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Darling cuts business rate rise | Darling cuts business rate rise |
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Chancellor Alistair Darling has gone back on plans to increase business rates by 5% from 1 April. | Chancellor Alistair Darling has gone back on plans to increase business rates by 5% from 1 April. |
Mr Darling said the rise was linked to the Retail Prices Index last year, but RPI inflation had now fallen to zero. | Mr Darling said the rise was linked to the Retail Prices Index last year, but RPI inflation had now fallen to zero. |
He said businesses would face only a 2% rise this year and the remaining 3% would be smoothed out over the following two years. | He said businesses would face only a 2% rise this year and the remaining 3% would be smoothed out over the following two years. |
"I believe this will provide real and genuine help for businesses in this country," said Mr Darling. | "I believe this will provide real and genuine help for businesses in this country," said Mr Darling. |
He estimated that one-and-a-half million properties would gain from the change and £600m would be deferred. | He estimated that one-and-a-half million properties would gain from the change and £600m would be deferred. |
"I am very conscious of the fact that businesses in this country were faced with an increase to business rates of 5% simply because the increase in business rates is linked to the rate of RPI inflation last autumn, last September," he said. | "I am very conscious of the fact that businesses in this country were faced with an increase to business rates of 5% simply because the increase in business rates is linked to the rate of RPI inflation last autumn, last September," he said. |
"But RPI inflation has now fallen to 0% in the last month and it is expected that it will fall further than that." | "But RPI inflation has now fallen to 0% in the last month and it is expected that it will fall further than that." |
John Wright, chairman of the Federation of Small Businesses (FSB), welcomed the move, saying: "This is good news for small businesses, as far as it goes. This shows that FSB pressure has finally paid off." | |
Mr Wright said the government still had "more room for manoeuvre" on business rates, and called on Mr Darling to bring in automatic small business rate relief for elegible small firms. |