The Business Rates Supplement Bill, part of the government's Draft Legislative Programme, will allow larger local authorities to levy a supplement on business rates of up to 2p per £1 of rateable value, although properties with a rateable value of £50,000 or less would be exempt. The revenue raised would then be invested in the local area.
Communities secretary Hazel Blears claimed the move would help free up local and regional government to drive economic growth.
Association of Convenience Stores chief executive James Lowman disagreed. "Yet again the government is introducing a new tax burden for local businesses," he said, pointing out that Business Development Districts already provided ways to raise funds for local investment.
British Retail Consortium director general Stephen Robertson called for the introduction of safeguards such as giving businesses a vote when a rate supplement was proposed, to prevent local authority abuse.