Darling announces delay to 5% business rate rise

Chancellor Alistair Darling has announced that the planned rise in business rates of 5% will be staggered over the course of the next two years and that business will only have to immediately pay a 2% increase.

"This measure will help businesses to smooth their rate payments over the next few years to deal with the effects of the recent spike in inflation," said Mr Darling.

The announcement comes after the Chancellor faced rising anger from business groups and landlords against the 5% rise in business rates. If the rise had of been fully implemented today it would have been the largest increase since the system was introduced in the early 1990s.

Although the move has been welcomed, there is anger that the relief will not be automatic and that it will be available from August at the earliest, meaning that businesses will have to pay the rate bills they have already been sent by local authorities.

"Staggering the cost is still an increase and it will be complex. Businesses will still be hit at a time when they have restricted cashflow and growth," said Kevin Hoctor, head of policy at the British Chambers of Commerce.