Senedd debate highlights Labour’s business rate betrayal
A Welsh Conservative Senedd debate has highlighted the plight faced by small Welsh firms following Labour’s failure to deliver a pledged cut to business rates.
Conservatives accused the Welsh Government of ‘betraying’ SMEs and urged them to deliver their election pledge to abolish business rates for all firms with a rateable value of up to £12,000.
Shadow Economy Secretary, Russell George AM, brought forward the debate following consultation with businesses across Wales.
He also said that the First Minister’s failure to prepare properly for the impact of the revaluations was a “kick in the teeth” for those firms.
Business rate revaluations will put some small companies in Wales out of business without additional support from the Welsh Government, according to Mr George.
Small and medium sized enterprises are the lifeblood of the Welsh economy, accounting for 99 per cent of the Welsh business stock. If each had the resources to employ one additional member of staff, unemployment in Wales would effectively be wiped out.
Mr George said:
“Many Welsh businesses will be questioning why a key pledge by the labour party to deliver a tax cut for all small businesses has not been delivered.
“Business rates have been devolved to Wales since April 2015, and yet the business community remains locked in limbo, waiting for a permanent scheme of support.
“In spite of Labour’s election promises to deliver a tax cut, the thresholds for rate relief have not changed, and many businesses now face a bleak future.
“We want to see business rates abolished for all firms with a rateable value of less than £12,000, and we will be using our debate to call on the Welsh Government to take a proactive approach to reforming an outdated business rates system.”
Shadow Cabinet Secretary for Finance, Nick Ramsay, said:
“The impact of the recent rate revaluations will be devastating for many small Welsh firms, and it’s clear that many will go under if additional support isn’t brought forward before April.
“It has also become abundantly clear that the Welsh Labour Government were ill prepared for the revaluations, and that the system simply doesn’t have capacity to handle the volume of challenges from firms who have been hit by substantial increases.
“Whilst the introduction of a transitional fund will help some of the firms affected we don’t believe that it goes far enough, and more needs to be done by the Welsh Labour Government to provide small firms with a soft landing when these changes come into play.”
To propose that the National Assembly for Wales:
- Recognises that the retail industry employs 130,000 people in Wales, and makes a key contribution to the Welsh economy.
- Notes that the current shop vacancy rate in Wales stands at almost 14%, and the projected rate of store closures is higher in Wales than anywhere else in the UK over the next two years.
- Regrets that the Welsh Government has not used innovative and supportive measures to help businesses through their transition to the Valuation Office Agency’s revaluations, leaving Welsh businesses to tackle high rates, alongside a system of temporary rebates and a slow appeals process.
- Calls on the Welsh Government to;
- Abolish business rates for all businesses with a rateable value of up to £12,000, and provide tapered support for those with a rateable value up to £15,000;
- To take a proactive approach to radically reform the outdated business rates system, and make Wales the flagship nation in addressing the need to provide a more supportive business environment;
- To place an immediate cap on the multiplier, and a timetabled plan for a gradual reduction in rates.