Federation against extra business rate; small business In association with RBS.

THE Federation of Small Businesses has called on the Government to drop its plans for a supplementary business rate, which it believes will hit jobs.

The UK's largest business organisation also repeated its belief that variable business rates across the country are a backward step. The FSB believes that if councils wish to raise more money from businesses in their area, then the Business Improvement District mechanism, which allows businesses in the area a vote on proposals, is the better way forward.

The Uniform Business Rate was established in 1990 specifically to prevent local councils in certain areas of the country from hitting firms with inflation-busting business rate increases. The FSB is also concerned that local economies will suffer if councils get the ability to raise further funding from the business rate. This is because councils would be able to avoid upsetting voters with higher council tax bills by putting up the business rate instead.

Colin Stratton, FSB North-East regional chairman, said: "Varying the business rate or creating a supplementary business rate is unnecessary.

The mechanism to raise extra money from businesses for specific local projects is already in place through Business Improvement Districts (BIDs), which at least allow businesses a vote on the proposals."