7. 7. Welsh Conservatives Debate: Business Rates

Part of the debate – in the Senedd at 4:17 pm on 23 November 2016.

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Photo of Jeremy Miles Jeremy Miles Labour 4:17, 23 November 2016

Thank you for that clarification. The other major issue that came up in that discussion, I think, was the question of revaluation and the period between revaluations. Gaps, obviously—lengthy gaps—can mean unfair conditions for some businesses, where the valuation doesn’t track the general economic performance, and I think it’s clear from the latest revaluations in Wales that the effects of the financial crisis are still very much being felt here. While overall values in England have gone up, largely as a result of the strong economic performance in the south-east of England, in Wales, of course, most businesses will face lower bills as a result. Either way, more frequent revaluations will help to iron that out, and I would ask the Welsh Government to look at that as part of the review.

The motion calls for us to look to become a flagship nation, when it comes to business rates, and, in fact, Russell George expressly asked us to look to the UK Government for inspiration on some of these things. On transitional relief, where Janet Finch-Saunders was very keen for us to take our lead from England, I commend the Welsh Government for not following the example of the Conservative Government in Westminster, who’ve made ratepayers themselves, who’ve seen a reduction in their rateable value, bear the burden of funding those who’ve seen theirs go up. So, the Welsh Government’s chosen to fund that itself, which is a clear signal of its support for the sector, and one of several ways in which I’d say that the system here is already fairer and more robust than the English system.

The most striking difference, I think, is the Conservative Government in Westminster’s plans for a redistribution, effectively, of business rates income from poorer councils to richer councils, allowing them to keep 100 per cent of their business rates. That obviously compounds the inequalities that already exist, and if that were to be replicated in Wales, it would be hugely detrimental to large swathes of the country.

We also heard warnings, not reflected in the video clips, about the dangers of following the appeals process that has been introduced in England, which has been seriously adverse to business in terms of the length of time taken and the costs incurred. I’m sure the Cabinet Secretary will have regard to those warnings when he brings forward his consultation on appeals specifically. I gently point out to those on the Conservative benches, in particular, who’ve asked us to be inspired by the English example, that if the test is what proportion of your small businesses is exempt from 100 per cent business rates, our system here, which covers 50 per cent of our small businesses, is doing pretty well against an English system where that figure is only a third.

But the motion is broader than simply business rates and looks at support for the retail sector more generally, which taps into a wider discussion about how we can revitalise our town centres in the face of real economic forces pulling in the opposite direction. I’d add that many towns, including Neath in my own constituency, have taken advantage of Welsh Government support to develop business improvement districts, which obviously aren’t universally popular, but they are an opportunity for close collaboration between local government, business and other stakeholders.

I draw attention to comments in the latest deep place study that Steffan Lewis mentioned earlier in today’s proceedings, which I think bear some reflection about devolving further economic development powers to a local level, and looking imaginatively at pop-up business premises and pop-up shops and so forth.

I think one of the fundamental reasons why our town centres are in the situation they’re in is because of the squeeze on the household budgets and disposable incomes of those who use them most, which I’m afraid to say today’s autumn statement hasn’t done anything to address.