The Chancellor delivered an extremely welcome Christmas present for retailers in his statement last week. But while we feel grateful for the gift, the consensus from the industry is that it has not been packaged in quite the right way.

The method of linking business rates to inflation has long been viewed as inappropriate and out-dated as even the most secure retailers struggle to meet the soaring prices. And following much noise from the sector to ensure the Government is made aware of the difficulties caused by these costs, the treasury has finally listened.

The initial fix is a good one, and although many were hoping for a freeze, the introduction of a 2% cap will still save the sector millions over the year ahead, enabling shops to stay open, thereby protecting jobs and boosting high street communities.

With this first step of respite the Government should now take the time to carefully assess what more can be done to reform the arrangement in the long-term.

As is well documented, our rates system is the highest property tax in Europe and requires further reform to encompass an appropriate and sensible solution that has longevity. It seems absurd that many smaller businesses are paying more in rates than they do in rents. These businesses in particular need to be nurtured and supported if the Government’s own mission to improve our high streets and communities is to see fruition.

Only a long-term solution can therefore truly ensure the sector will thrive and remain competitive and we hope the Treasury’s commitment to further review the system will reveal a solution that goes far deeper than this initial stop-gap. Certainly, the delay to the revaluation from 2015 to 2017 will not help business’ confidence about the Government’s commitment to the situation.

So what are the options? There are a host of items - beyond rates - that can be considered that would benefit retailers, whilst not damaging the Government’s wallet. Unsurprisingly, the best way is through encouraging consumer spend.

The priority mission should be to ensure that retailers, landlords and communities work together more effectively to benefit shopping destinations. Relationships must be strengthened to ensure shoppers are encouraged and incentivised to visit their local high street and spend in the community.

If you ask consumers what’s most putting them off spending in physical shopping destinations, parking is often the number one response. And this week the DCLG announced a plan to encourage people to shop locally by making it cheaper and easier for shoppers to park. Again, this is a step in the right direction but it will likely require more than merely reviewing the double yellow lines.

There is no single solution to strengthen the retail industry, but rather a fusion of positive changes and solutions. Rates is one pressure and further review and reform will provide even greater – and much needed – respite. But this cannot be done in isolation of the renewal of our local communities and the salient role that consumer spend has on the health of the sector.

  • Iain MacRitchie is the chairman of Hobbs