Chancellor George Osborne is likely to make an Autumn Statement announcement extending business rates relief for small firms until the end of the current Parliament, Westminster sources have claimed.

The Free Enterprise Group, comprised of 37 influential Conservative MPs, has issued a report today urging the chancellor to make councils scrap charges on businesses owning vacant commercial premises.

The MPs also called on Mr Osborne to exempt small firms on properties with a rateable value of £6,000 or less and offer for relief on those whose rateable value is less than £12,000 per year.

Some £1.1bn was paid on local rates in empty non-domestic properties in 2011/12 – a hike of nearly one fifth (19%) since 2009/10, according to figures compiled by the TaxPayers' Alliance campaign group in April.

Exemptions which had previously protected vacant industrial premises were lifted in 2007, as were a system of reliefs and reductions which had applied to empty commercial premises.

Current arrangements for business rate relief are set to expire next year, meaning Mr Osborne will have to make a decision.  Although the Free Enterprise Group have called for relief to be made permanent, with an upper limit of £14,000, insiders believe the measure will continue for the lifetime of Parliament.

Conservative MP Kwasi Kwarteng, who leads the group said: ‘In preparing his Autumn Statement, George Osborne should consider how tough life is for many businesses. The combination of business rates and red tape is stifling people's ability to drive the economy forward.'

Separately, the leader of Westminster City Council, Cllr Philippa Roe, has predicted that the chancellor will outline this Thursday how community budget schemes could be improved and rolled out nationally.

‘This is why central government needs to keep its nerve and see through its commitment to move money away from the centrally-driven, one-size-fits all approach,' Ms Roe said.

She said this could not be achieved through simply cutting budgets across the board.

‘We believe this could be done through Public Service Reform Deals where areas or groups of areas should be able to come together and negotiate a specific deal – where nothing from business rates to community safety is off the table – around public service reform with Whitehall, tailored to local needs and requirements,' Ms Roe added.