The Government has promised to base future business rates on the CPI measure of inflation, which is expected to benefit many businesses including retailers.

Campaigners have pressed for the switch to CPI from the RPI inflation rate because the latter rises faster and often outpaces growth.

The Treasury has voted to base future business rate rises on the lower measure, the Mail on Sunday reported.

“We are committed to switching business rates indexation from RPI to CPI from 2020 and will introduce legislation in due course,” a Treasury spokesperson told the newspaper.

The burden of business rates has been blamed for affecting the ability to compete of bricks-and-mortar stores versus etailers.

The changeover to CPI is expected to be made in 2020.

Business rates bring in about £25bn a year and the switch should save businesses £1bn in the first three years, according to the Treasury.

Retailers are expected to save £250m as a result of the change.

Proposals to reduce business rates were revealed in last year’s March Budget, but many feared the idea would never be enacted.