In today’s (5 December) autumn statement announcement, Osborne capped increases at 2 per cent rather than in line with inflation. Additionally, businesses moving into vacant high-street shops will see their rates cut by 50 per cent.
The Chancellor also announced the Government would launch a discussion paper on permanent reform of the rates system next year.
Retail associations welcomed the news, adding the real-terms reduction will take the pressure off retailers struggling to compete with online rivals.
Helen Dickinson, director general of the British Retail Consortium, says: “The Chancellor has recognised that businesses are suffering and is right to listen to retailers’ concerns on business rates. The BRC has campaigned for a 2 per cent cap, and reform of the business rates system, and it is extremely welcome to hear it announced.”
Elsewhere, Osborne unveiled measures intended to reduce the cost of living for people struggling to cope with accross-the-board price increases. The 2 pence per litre increase in fuel duty planned for 2014 was scrapped, while the reduction in green levies to cut energy bills by £50 per annum was confirmed.
On the economy, growth forecasts for the current financial year were revised up from 0.6 per cent to 1.4 per cent and the next from 1.8 per cent to 2.4 per cent.
Osborne says the upward revision proved the Government’s austerity approach was working. “The plan is working – it is a long-term plan for a grown-up country. The job is not yet done but Britain is moving again. Let’s keep going, ” he said delivering his statement to MPs at the House of Commons.
Labour Shadow Chancellor Ed Balls hit back, saying that the Government was “in denial” about the cost of living crisis. “For all his complacent boasts, for three damaging and wasted years, for most people there is no recovery at all.”
A spokesman for the Advertising Association says the Chancellor’s optimism ”reflects UK advertising’s own confidence”. The latest AA/WARC forecasts have ad spend growing at 5.2 per cent in 2014.
Thomas Brown, associate director of research and insights at the Chartered Institute of Marketing, adds: “With the country’s economic growth forecasts increased again for 2014, and as the economic recovery continues to gather momentum, marketers will no doubt welcome some of the announcements from George Osborne today…..“These announcements from government go some way in working towards policies that will drive business growth and support the gains made through increased consumer spending, and are significant as marketers look to ensure their readiness for 2014.”