Business rate exemptions for small traders have been welcomed – but an overhaul of the “old fashioned” system is urgently needed, industry figures have warned.

Wednesday’s Autumn Statement saw chancellor George Osborne announce plans to increase the rate of relief on bills for small businesses.

The news was welcomed but many have said it has not gone far enough to help independent traders.

The £1,000 discount on rates for pubs, restaurants and small shops with a rateable value of £50,000 or below, was increased to £1,500.

A £500 million lending pledge was made for small to medium sized enterprises (SMEs) through the Enterprise Finance Guarantee Scheme.

A £400 million extension was made to the British business bank Enterprise Capital Funds scheme, as well as an extension to the Funding for Lending scheme to boost bank lending to small to medium sized businesses, Julia Chanteray, president of Brighton and Hove Chamber of Commerce, said: “Brighton and Hove has a very high proportion of small businesses compared to other cities. If we had to pay the same rates as big companies it would be a real barrier to growth.

“We also think that waiting until 2016 to review the ridiculously old fashioned rates system is far too long, businesses need to know where we stand now so we can plan for the future."

Fiona Lowden, of TaxAssist Accountants Horsham and Burgess Hill, said: “This is welcome news for local business owners seeking vital finance for growth, but we will watch closely to see how this is actually delivered.”

Clair Letton, co-founder of Wigwam Toys, in Preston Drove, said: “Brighton a great, dynamic place to build a business – but it’s also really tough for many – especially when you’re just starting out – as rents here are so high.

“We need the government to recognise the value of small businesses like ours and we need policies to reflect that value and make things easier for people to get their ideas off the ground and for their business to survive – and hopefully thrive.”

Caroline Lucas, MP for Brighton Pavilion who has campaigned for the rate relief to be broadened, added: “The vast majority of businesses in Brighton and Hove are small or micro-level, and they’re the backbone of our local economy.

The business owners I meet in my constituency tell me they’re struggling with business rates. The Government has dragged its feet on this for years– and a review is welcome.

“But Brighton’s businesses need action, now.”