High street bakery chains have welcomed the decision to reduce a planned 5% rise in business rates, but say the government should have scrapped the increase altogether.

Chancellor Alistair Darling made an 11th-hour climb-down on 1 April over plans to introduce an inflation-busting 5% increase in business rates, following pressure from business groups. He opted instead to introduce a 2% increase this year, with the remaining 3% to be paid over the following two years.

Mike Holling, retail and sales manager at Birds of Derby and chairman of the National Association of Master Bakers, said the reduction would help ease pressure on bakery retailers this year, but deferring the remainder was a "sting in the tail". "The government could really have helped small businesses by completely freezing business rates, but, as always, you have to pay at some point," he said.

Thomas Adams, MD of Northampton bakery chain Oliver Adams, said the decision to reduce business rates was welcome, but had been left too late. "We have already paid a large part of our business rates at the 5% rate, because the decision was made so late on."