The government has started consultation on a £2bn transitional relief scheme to help businesses after the 2010 business rates revaluation.

Communities and Local Government started consultation yesterday on a £2bn scheme to limit and phase increases to rates bills resulting from the revaluation. It said most businesses - 60% - would see their rates bills fall.

The relief scheme is self-financed by businesses, as it redistributes money collected from business rates from businesses across the UK. The government is consulting businesses on how this should be run.

The transitional scheme would limit rises in business rates in London, which would go up by 10% in 2010/11 without the scheme, to just a 3% rise. However, in areas like the East Midlands where business rates are set to fall 10%, the transitional scheme would mean they would only fall by 4%.

Local government minister Rosie Winterton said: 'Overall, the effect of revaluation for the majority of businesses could be a reduction in their rate bills next year, with some of the largest decreases in sectors such as industry and manufacturing. But while most will see falls, for the minority with increases we are putting in support to help keep down potential rises and we are today consulting and asking business how this scheme should run. This is on top of wider support available to help ease business pressures including discounted rate bills for small business, deferring tax payments and free business health checks.’