A cut in business rates could provide the catalyst in revitalising the high street, according to a Birmingham businessman.

Tafazal Ali and business partner Javed Hoque moved into the coffee trade when their Red Couch coffee house opened its doors three years ago.

The shop occupies a prime location on Erdington’s High Street, an area which 26-year-old Mr Ali said has “struggled” during the recession.

He said: “Once upon a time, before we opened up here, Erdington was a really busy shopping area, but now with the recession and places like the Fort Shopping Centre, the footfall has decreased.

“You don’t seem to get as many people making the special journey to shop here but as a coffee shop, we have a unique selling point on Erdington High Street and we try to maximise that.”

Graduate Mr Ali said he and Mr Hoque had worked to forge local links with the community at the Red Couch, which is used by community groups for meetings and displays work by local artists and photographers.

Annual business rates for the Red Couch currently stand at £6,000, and Mr Ali welcomed the one-year cut from October to help 500,000 companies.

He said: “On a personal level it is good news for us because we will have more money to play with.

“I think the cut would encourage more people to open businesses and if building owners are compromising rents to try and get people in, then this is a good time to move onto the high street.”

Despite a testing three years, Mr Ali said being a small business could be an advantage.

He said: “Things are ticking over nicely for us and we are now open 9am-9pm on weekdays and over the weekend to try and maximise customer numbers, but small businesses can make those sort of decisions.

“As a team of five, we can put that extra bit of effort to make it, whereas larger businesses have things like bigger overheads and more staff to cope with.”

The Federation of Small Businesses (FSB) welcomed the help for small businesses but said it was disappointed that Chancellor Alistair Darling was pressing ahead with the proposed hike in National Insurance Contributions (NIC).

FSB chairman John Walker said: “This Budget has provided welcome news on helping to improve small businesses’ cash-flow but the increase in the NICs will be bad for job creation.”