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Philip Hammond, the chancellor, has announced measures to help small businesses cope with upcoming changes to business rates that have sparked controversy among members of his own party.

The chancellor had come under pressure to ease the burden of steep rises in business rates following the revaluation of properties this year.

Outlining the Budget for the coming year, Mr Hammond said he had listened to the concerns raised by colleagues and businesses and outlined three measures to help small businesses in particular cope with the changes, saying that “the revaluation has undoubtedly raised some hard cases”.

First, he proposed that no business losing small business rate relief would see their bill increase next year by more than £50 a month, with subsequent increases capped at either the transitional relief cap or £50 a month, whichever is higher.

Second, he said he recognised the “valuable role” that local pubs played in local communities and proposed a £1,000 discount on business rates bills in 2017 for all pubs with a rateable value of less than £100,000 – which would encompass 90 per cent of all pubs in England.

Third, he said he would provide local authorities with a £300m fund for discretional relief to target individual hard cases within their areas.

Prime Minister Theresa May had promised in a recent prime minister’s question time session that the chancellor would review the business rates scheme with a focus on softening the blow of revaluations on smaller businesses that would be particularly adversely affected.

At the time, the prime minister’s spokesman did not say whether the review would lead to an increase in the proposed £3.6bn transitional relief scheme or simply a reallocation of funds within it.

The changes are set to take effect on April 1 but many MPs within the Conservative Party had warned of the damage the changes could do to local businesses within their constituencies, with some businesses looking at hikes well in excess of 100 per cent of their current rates where properties have risen steeply in value.

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