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Darling defers business rate rise

Published:  01 April, 2009

The Chancellor Alistair Darling has performed a last minute u-turn deciding not to increase business rates today by five per cent which has been seen as good news for struggling retailers.

This has also been a major victory for the British Retail Consortium BRC, who have campaigned against the rises.

Tomorrow's increase will be limited to two per cent, but the remaining three per cent rise has not been completely scrapped and instead will be spread over the next two years.

Stephen Robertson, the director general of the British Retail Consortium BRC, 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 is welcome.

"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 the 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 five per cent as planned.

"But the Chancellor has only taken the first step. The timing has changed but the eventual costs haven't.

"He still plans business rates increases totalling £1.6 billion by 2010/11, that's 30% more.

The BRC is meeting the Government ahead of the budget to discuss the next moves.