CHANCELLOR Philip Hammond is expected to deliver a boost for struggling high street businesses in today's budget in the shape of rates relief but business leaders have warned that the measures do not go far enough

The Chancellor is tipped to announce £900 million in business rates relief for almost 500,000 small retailers.

A £650 million fund will also help transform high streets, improving transport access and turning empty shops into homes and offices.

Philip Hammond. PIC: PA Philip Hammond. PIC: PA

Chancellor Phil Hammond - what will his budget box contain?

As more people switch to online shopping, high streets have taken a battering in recent months, with major retailers such as Toys R Us and Maplin going bust while a slimmed down House of Fraser had to be rescues from receivership and Debenhams has just announced plans to close 50 stores, putting 4000 jobs at risk.

However, the business rates relief being offered by Mr Hammond will be aimed at around 496,000 small retailers and will knock a third off their bills.

As some shops will no longer be viable, there may be changes to planning rules to allow them to be converted into homes or offices.

Business leaders have warned plans for rate relief to aid the high street won't help the big stores in trouble like Debenhams

Helen Dickinson, chief executive of the British Retail Consortium said the business rates announcements would not help the larger firms employing the majority of workers.

"Struggling high streets require a broader outlook in order to thrive, particularly given the majority of the UK's 3.1 million retail workers are employed in businesses that will not benefit from this announcement.

"The underlying issue remains that the business rates burden is simply too high and this unsustainable system needs less tinkering and more wholesale reform within the context of the wider taxation system."

Ross McNally, executive chair of Hampshire Chamber of Commerce, also called for wholesale reform of business rates.

"With the high street needing to reinvent itself to compete with online retailers, there is no better time to do this. We should reform business rates now before we see any more empty shop fronts. We must keep our town centres alive."

Mr Hammond has also signalled that there will be 28.8 billion to upgrade England's motorways and other major arterial roads in a drive to improve economic performance and address the "productivity gap". Included in this figure is £420 million for councils to repair potholes.

Ross McNally, Executive Chair at Hampshire Chamber of Commerce. Ross McNally, Executive Chair at Hampshire Chamber of Commerce.

Ross McNally, executive chair of Hampshire Chamber of Commerce says his organisation wants rate reform, more money for infrastructure and help to combat the skills shortage

Mr McNally said: “Transport infrastructure is another huge problem, particularly in a region such as the Solent with its mobility-of-labour issues. If there is any kind of dividend to come out of deficit reduction and paying down the national debt, of course we should spend on the NHS but funding should also go on improving transport infrastructure. Other investment priorities that would boost the economy are skills and housing, though not at the expense of employment land.

“We would like to see more government support for the two local enterprise partnerships in our area, Enterprise M3 LEP and Solent LEP. These are under-resourced to meet the economic challenges we face in Hampshire, particularly on transport infrastructure and mobility. Government could be doing far more to support the artificial intelligence and data economy, the future of mobility, clean growth and innovation to meet the needs of our ageing population.

"We have many companies, across our county, who are doing great things in these areas but they do need a better landscape of business support to enable investment and the chance to seize export opportunities.”

Also on the chamber's wish list for the budget is reform of the apprenticeship levy.

"We need to make some fairly radical changes in it to ensure that money raised from medium to big business is truly spent on apprenticeship places to solve the UK’s chronic skills shortage," said Mr McNally. At the moment, there is a disconnect between the amount of money levy payers are contributing and the actual provision of apprenticeships. We particularly need to ensure SMEs are better placed to support apprenticeships."

Don't forget manufacturing, is the plea to the chancellor from James Robinson of PKF Francis Clark

James Robinson, head of Manufacturing and Engineering at accountants PKF Francis Clark, which has office in New Milton, called for more support for manufacturing.

He said: “Manufacturing is a key part of the UK economy, employing 2.7 million (up 145,000 from 31 March 2013) and accounting for ten per cent of UK output.

“In the South West, alone, latest figures reveal that 247,000 people are employed in the manufacturing sector with output calculated at £14 billion annually.

“But it faces great challenges, not least Brexit. Manufacturers, especially those relying on complex supply chains, desperately need clarity about our future intentions.

“And let’s not forget Research & Development (R&D). Manufacturing accounts for 69 per cent of business R&D and is vital to keeping the UK at the forefront of technological change. Measures to incentivise businesses to invest in future technology would be very welcome.”

Mr Hammond is due to deliver his budget speech at 3pm.