Autumn Statement 2014: George Osborne will 'launch review' into business rates system

The Chancellor will announce a probe into the structure of business rates in his 2014 Autumn Statement, according to the Daily Telegraph.

George Osborne is expected to say that a review will be completed by early 2016.

The Confederation of British Industry (CBI) has called on the government to reform the system.

The business body wants Osborne to switch the uprating of business rates from the Retail Price Index (RPI) to the Consumer Prices Index (CPI).

"Businesses want to see a pro-growth Autumn Statement," said John Cridland, the director-general of the CBI.

"That's why we are calling for an overhaul of the outdated business rates system, which harms companies' growth, and expanding research and development tax credits, to further improve the UK's ability to compete globally."

Osborne announced before the Autumn Statement that the government would give small and medium-sized UK businesses a £900m ($1,408m, €1,137m) lending package.

"The government's long-term economic plan is working with the Funding for Lending Scheme playing a vital role in supporting the recovery," Osborne said.

"Now that credit conditions for households and large businesses have improved, it is right that we focus the scheme's firepower on small businesses, which are the lifeblood of our economy.

"That's also why we've reformed the banks, introduced the British Business Bank and are now focusing the Funding for Lending Scheme on supporting them."

The policy will see the Treasury give £400m to expand Enterprise Capital Funds, which invest in rapidly growing SMEs.

Osborne will also give up to £500m of new bank lending to SMEs through The Funding for Lending (FLS) scheme, which will run until January 2016.

The government claimed that the FLS has contributed to a "substantial" fall in bank funding costs since its launch in mid-2012.

The incentives in the FLS were re-focussed towards business lending in November 2013.

The extension announced today will continue to provide support to "where it is most needed", by focussing the incentives in the scheme towards lending to SMEs in 2015.

"By providing a backstop for funding for banks, the FLS has supported access to credit across the economy during an exceptional period," said Mark Carney, governor of the Bank of England.

"As the banking system has been returned to health, the need for that backstop has been reduced.

"The scheme is not permanent so, as access to credit has returned to the mortgage market and large corporations, the scheme has been tapered appropriately.

"The extension announced today concentrates the FLS on the one area where support remains warranted: the supply of credit to SMEs."