The chancellor will cut business rates bills by a third for almost half a million small high street shops in a £1.5bn spending pledge to fight the threat posed by Amazon and other online retailers.

In next week’s budget, Philip Hammond will order £900m of immediate business rates relief for small retailers in an effort to combat shuttered shops on the high street, where small businesses have been threatened by high rates and the rapid rise of online shopping.

Small retailers will be the focus of the business rates relief. A Sheffield pub with an estimated rental value of £37,750 would be likely to save £6,178 on business rates next year. A Birmingham newsagent would save £1,749 with a rental rate of £14,250.

The chancellor will hope the move gives some short-term relief for struggling retailers but the budget will include a £650m transformation fund for local high streets to help them transform longer-term, including supporting infrastructure and transport access.

Chancellor of the Exchequer Philip Hammond at 10 Downing Street in London. Photograph: Wiktor Szymanowicz/Barcroft Images

Business groups said they were relieved. The Federation of Small Businesses’ national chair Mike Cherry said: “For far too long they have come up against an outdated and unfair rates system and it’s clear that change is needed.”

Cherry said that firms would be hopeful the relief would be extended to hospitality and service businesses, not just retailers, when the details are laid out.

However, the CBI’s chief economist Rain Newton-Smith said there was far more intervention needed to save UK high streets. “It’s no secret that the UK’s high streets are under pressure, with boarded-up shops all too frequent a sight in many parts of the country,” he said.

“The roots of the problem go far deeper though, with business rates giving larger retailers serious headaches, alongside manufacturers and logistics firms. There must be a wholesale review next year to deliver a system that encourages greater investment in digital, new technologies and energy efficiency.”

Another budget reform that is likely to be more controversial is a review into relaxing town planning rules, to ease the conversion of under-used retail units.

The British Chambers of Commerce co-executive director Hannah Essex sounded a warning about the plans. “We’ve already seen high streets being hollowed out by the encroachment of residential spaces,” she said. “For high streets to thrive they need a balance of tenants, and we’ve already seen unintended consequences from previous planning reforms.

“Sacrificing business land for the sake of housing leaves no room for the commercial spaces that are fundamental to job and prosperity creation on the high street and elsewhere.”

The budget will also lay out plans to make it lawful for the first time for English and Welsh couples to marry in parks, up mountains or on the beach. Hammond is understood to have been convinced marriage rules are outdated, though the most wacky venues may still not be officially be approved. The Treasury will say it is essential the dignity of marriage ceremonies are preserved.

The Law Commission, which will be asked to review the law, has already authored a 2015 report which suggested the government should try and accommodate the increasing demand from couples to have a legally binding ceremony outdoors, which is permitted in Scotland.

Currently couples who marry in approved venues face a restricted choice of venue and usually additional expense – around 40% of approved premises are hotels.