The changes to the UBR transitional arrangements are a continuation of a similar freeze last year, when rates increases on large properties were limited to 20 per cent above inflation year on year, and increases for small properties limited to 15 per cent.
The Government introduced the freeze because the launch of the UBR in 1990, coupled with the first nationwide revaluation of business properties in 17 years, threatened to burden businesses with rates increases of many hundreds of per cent.
Mr Lamont said: 'As a result of this and last year's measures, no business will face a real increase in its rates bill in the year ahead, and many will benefit from reductions. In cash terms, that means no bill will rise by more than 3.6 per cent, the increase in the retail price index in the year to last September.'
He said the Government would again pay extra money into the business rates pool to ensure that the income of local authorities was not reduced by the freeze.
Michael Howard, Secretary of State for the Environment, said the announcement would be 'welcomed especially by businesses in the South-east who were faced with the largest increases in their rates bills as a result of the 1990 revaluation'.
'The change will reduce nearly half a million rates bills in England by some pounds 320m in 1993/4 and pounds 220m in 1994/5, on top of the pounds 1.25bn package we announced last year,' he added.
The reduction in total business rates bills in England and Wales next year would equal 2.6 per cent, said the Chancellor. Bills in Scotland and Northern Ireland would likewise be reduced by 2.6 per cent in aggregate.
The cost in lost revenues was estimated at pounds 370m in 1993/94 and pounds 260m in 1994/95.Reuse content