The following amendments have been selected: amendment 1 in the name of Jane Hutt, and amendment 2 in the name of Rhun ap Iorwerth. If amendment 1 is agreed, amendment 2 will be deselected.

The next item is the Welsh Conservatives debate on small business financial support. I call on Nick Ramsay to move the motion.

Motion NDM6207 Paul Davies

To propose that the National Assembly for Wales:

Calls on the Welsh Government to provide more support for small businesses affected by the 2017 non-domestic rates revaluation, including more information regarding the £10m additional funding announced in December 2016.

Motion moved.

Diolch, Presiding Officer. Today we are calling on the Welsh Government to provide more information regarding the £10 million additional funding for business rate relief announced before Christmas. The Valuation Office Agency’s business rate revaluation will result, as we know, in businesses in some parts of Wales facing huge hikes in their rates. Let’s be clear about what that means in practice. It means, at best, businesses having less money to invest in their premises, in their staff, and, ultimately, in their future. At worst, it means businesses having to shut up shop and call it a day. Rural businesses in particular are facing hardship in light of the Valuation Office Agency’s revaluations, with some experiencing a percentage rise in triple digits, and others stating that they will have to close because of the rate rises.

The Welsh Retail Consortium has said that, following on from the revaluation in April 2017, current predictions are showing that the projected rate poundage for Wales could jump by a staggering 10 per cent, making Wales the highest taxed and least attractive place to do business in the UK, based on our rates system—not my words, not Welsh Conservative words; the words of the Welsh Retail Consortium.

Now, as the Cabinet Secretary will know, I’ve been particularly concerned about all this from the outset because of the impact it particularly has in my constituency, where nearly 65 per cent of businesses will be affected by the revaluation. The Monnow Bridge Fish Bar in Monmouth will be hit by a 200 per cent plus rise, taking it from £9,800 to over £20,000. The Oasis hair salon in Monmouth will see its business rates almost doubled, from £4,250 to £7,110.

In the 2016 budget, the UK Government set out a number of key policy changes in order to assist SMEs, including raising the small business rate relief threshold from £6,000. Welsh Conservatives believe that the same should happen here. Now, in July 2016, the Scottish Government requested submissions to the Barclay review into business rates. The Cabinet Secretary here has announced a review of business rates in 2018, and we warmly welcome this review; we believe it’s necessary. However, you can’t blame businesses for questioning whether this is too little, too late, for those SMEs that are facing substantial rises.

Now, turning to the Cabinet Secretary’s announcement of a £10 million transitional relief scheme for small businesses affected by the revaluation, we know this will be available from 1 April, and, according to the Cabinet Secretary, will be in addition to the so-called existing £100 million tax cut for small businesses in Wales. We welcome this transitional relief scheme, but is it sufficient to cover the high rates some businesses will now face beyond 2017? The Welsh Government must now look at raising the rates relief bands and splitting the multiplier, as has happened across the border in England. In the meantime, we do at least have this commitment from the Welsh Government for extra funding—and we do welcome that—for businesses in high streets across Wales, and I know that some of the detail that the Cabinet Secretary has already announced does indicate that it will specifically apply to businesses in our ailing high streets, and, as I say, we welcome that.

Cabinet Secretary, businesses now need clarity as to when and how this money will be allocated and how businesses will be applying for it and able to apply for it. We’re already in January, this has now gone on for weeks, months, and the clock is ticking. I ask this Chamber to support this motion, and let’s all get on with the job of helping Welsh businesses weather this storm and move on to brighter days ahead.

I have selected both amendments to the motion. If amendment 1 is agreed, amendment 2 will be deselected. I call on the Cabinet Secretary for Finance and Local Government to formally move amendment 1, tabled in the name of Jane Hutt.

Amendment 1—Jane Hutt

Delete all and replace with:

To propose the National Assembly for Wales:

Recognises:

a) non-domestic rates contribute £1bn towards the provision of public services in Wales;

b) the Welsh Government will provide more than £200m of support for ratepayers in Wales in 2017-18 to pay non-domestic rates; and

c) the Welsh Government’s 2017-18 Budget includes a new £10m transitional rate relief scheme to help businesses affected by the 2017 revaluation carried out by the independent Valuation Office Agency and a new £10m special targeted relief scheme to provide additional support to high-streets.

Amendment 1 moved.

Formally.

I call on Adam Price to move amendment 2 tabled in the name of Rhun ap Iorwerth.

Amendment 2—Rhun ap Iorwerth

Add as new point at start of motion and renumber accordingly:

Welcomes the £10m additional business rate relief secured by Plaid Cymru as part of the 2017/18 budget negotiations.

Amendment 2 moved.

Thank you, Llywydd. I agree with the vast majority of what the Member for Monmouthshire has said. We share the disappointment, of course, that the Government, in the first instance, hadn’t seen fit to bring its own recommendations for reforming the system in its entirety to decrease the significant burden on businesses in Wales. Certainly, there is evidence that shows, from different perspectives, that the burden in Wales is greater. That’s a very negative thing, of course, in terms of the competitiveness of our economy and in terms of the prosperity of our businesses. I do think that it would have been better to present those changes that were in the Labour manifesto sooner. That is, they were sufficiently clear in their manifesto. We could have a wider debate about a more radical reform of the policy, to tell the truth. We’ve discussed the possibility here of moving away from a business rates system entirely. But I don’t know why the Government didn’t introduce those changes sooner.

Our amendment, of course, refers to the fact that we, at least, succeeded, because of the significant increase as a result of the revaluation seen in certain parts of Wales. He’s talked about his own constituency, but it’s also true in parts of the north—the north-west, I think, has seen, on average, the greatest increase. So, we felt, in the context of the discussions that we had with the Cabinet Secretary with regard to the budget, that this was a matter of priority.

It would have been much better, of course, to have a more wide-ranging policy in place, but at least we succeeded, through the agreement that we reached with the Government, to double, truth be told, the level of temporary relief available to businesses. I’m pleased to see that that does include those sectors in terms of retail and hospitality that have expressed the greatest concern with regard to the revaluation. I do think that the Member for Monmouth is asking for something that’s perfectly reasonable. Businesses now are starting to plan for the next year, and, unfortunately, some of them—or more than just some; several—are in a situation of difficulty in terms of deciding whether they’re going to be able to continue to operate or not. So, it is important and I do hope that the Cabinet Secretary is listening to the appeal from the Member for clear and correct information about how the system’s going to work.

Thanks for giving way; I agree with everything you said there, Adam Price. Part of the problem is that, although the revaluation kicks in in April, a number of businesses are having to decide whether to sign their leases now, at this point in time, and, without knowing what sort of system of rate relief will be in place, what package of support will be in place for them in April, some of them are saying, ‘Well, we just can’t take the risk and we’re better off getting out of the situation that we’re in now without waiting’.

Yes, and certainly that would be something that we would all want to avoid, truth be told, because as we always say—we say it all the time because it’s true—small businesses are the backbone of our economy throughout Wales. It’s certainly true in the rural areas, which have suffered the most as a result of this revaluation. So, I do hope that the Cabinet Secretary will be able to tell us how and when that more comprehensive information will be available to businesses so that they can make the decisions that they need to make. I agree with some of the wider comments that the Member made with regard to looking at the different methods we can use to adapt the system in Wales to ensure that it’s not, as is true at present, a fetter on economic development. We have to now look carefully, in the context of this more wide-ranging review of policy, at the more radical suggestions with regard to how we can create a taxation context for businesses that helps us, rather than places a burden on us.

I think we must all welcome and acknowledge the financial help afforded by the Welsh Government to businesses affected by the recent valuation process and indeed over the preceding years. However, we in UKIP are concerned that, given the scale of the recent valuation process and its consequences, the present funding levels may well prove inadequate. However, whether this funding is adequate or not, we feel that it’s essential that information on this rate relief scheme is readily available to those who qualify and the procedures and application processes involved are as simple and as accessible as possible.

All too often, grant applications have been so complicated and convoluted that small businesses have been dissuaded from accessing the finance available. Following on from this, and in the same vein, the appeals procedures must also be as simple, available, and affordable as possible. In addition, time is often a crucial factor in this appeals procedure, as the increased financial burden placed on businesses by reaching the rates payable threshold can often be a crucial factor in whether a business survives or not. We understand that current appeals procedures can take up to a year or more to be decided, often proving far too long to prevent business closures.

So, can I call upon the Welsh Government to put in place all the necessary apparatus to make sure that the appeals procedure is dealt with as expeditiously as possible? Because it is clear that these revaluations will impact on a large number of businesses with potentially disastrous consequences—something I’m sure all the parties in this Chamber are anxious to avoid.

I welcome the opportunity to briefly contribute to this debate. Like David Rowlands and others in the Chamber, I do welcome the moves that the Welsh Government have undertaken with the announcement of the additional money that has been put in to support businesses who have found themselves on the wrong end of this revaluation process. But that doesn’t take away, as we heard yesterday both from Nick Ramsay in his question to the First Minister and myself in questioning to the leader of the house, how there is little information there to understand exactly how this £10 million extra that was announced from 17 December is actually going to be used and distributed to assist businesses. As has already been addressed here this afternoon, there are businesses in a real dilemma about signing new leases, about making those commitments, and that information is desperately required. I do hope that the Minister today will use the opportunity in responding to this debate to give us a little more information, if not the entire package, I would hope, so that our constituents and businesses that have these concerns can actually understand how this additional money will make a difference.

This morning, Nick Ramsay, Russ George and myself, along with the Petitions Committee Chairman, Mike Hedges, received a petition here in the Assembly from Sally Stephenson of the Pencil Case business in Cowbridge and David Cummings from the chamber of trade in Monmouthshire, who accentuated this issue around the lack of information and the importance of getting that information out as quickly as possible. I do think that this evening’s debate is offering a unique opportunity for the Minister to actually focus on getting that information and using the platform that this debate affords him to obviously inform the Assembly and people who are waiting for that information to come to make those business decisions.

There is also the real logjam that people are finding when they’re seeking responses from the valuation office, in particular around appeals. This is a point that I’ve raised with the Minister before, about making sure that the valuation office does respond in a timely manner when a business does find itself on the wrong end of the valuation. Some of these increases in valuations have been absolutely astronomical—not in the tens of percentage points but in the hundreds of percentage points—increases from where they found themselves under the previous valuation. In particular, there do seem to be specific sectors that have particularly been hurt by this revaluation—the secondary shopping sector and in particular the food sector in the hospitality market. That does seem to have come off particularly worse when it comes to looking at where these valuations are hurting businesses that historically have had a pretty lean couple of years and really are teetering on the rope of whether they stay in business for the next 12 months or whether they just say, ‘Enough’s enough’.

We appreciate that the business rate regime does need reforming, and we look forward to the way the Cabinet Secretary brings forward those discussions, in particular with a date of April next year. It cannot be right that you have a system that penalises businesses that was first brought forward in 1604, I think it was, when there was no Amazon, and when there was no online shopping. Ultimately, we really are in a competitive marketplace now that really has a dramatic impact on the viability of many shops and retailers in rural locations in particular, who have limited opportunities to diversify their income, and business rates are one of the key weights around those businesses’ necks.

We have spoken at length about what we would like to see on this side of the house, which is the threshold being lifted from £6,000 up to £12,000 and then tapered up to £15,000. That would make a massive difference in the ability of businesses to invest in themselves, because we know that that money would not disappear into some holiday fund—it would be kept within the business to create jobs and to create investment. I do hope that, in the discussions leading up to the change in the business rate regime next April, the Cabinet Secretary does look at the opportunity around thresholds and around making sure that, in particular when it comes to the business rate multiplier, he does look at the suggestions that we have put forward previously when it comes to out-of-town shops and the big multiples and the rates that they might pay.

So, I would implore the Cabinet Secretary to use his opportunity this evening to give more information as to how that additional money that he has made available on 17 December will be distributed and made available to businesses, because we are a little under nine weeks away from many of those businesses having to find that money to pay when it comes to the early part of the new financial year.

I call on the Cabinet Secretary for Finance and Local Government—Mark Drakeford.

Diolch yn fawr, Lywydd. Let me begin by just making a number of general points that haven’t been raised in the debate so far. I think it’s important to put on record that revaluation raises no extra money at all; it is not a tax-raising measure. It simply redistributes the burden so that it is more fairly shared between businesses across Wales. And while we recognise that there are businesses who face higher bills, there are far more businesses in Wales who find their bills going down and are able to do all those things with that additional money that other contributors to this debate have pointed to in using that opportunity to invest further in their businesses.

The valuation agency is entirely independent of the Welsh Government, but where we are able to, and particularly in relation to appeals, I intend to act to make that system more effective, less burdensome and to the advantage of businesses.

Let me say as well that we pay taxes for a reason. We pay taxes because we all get the collective benefits of doing so, and businesses get that benefit as well. All non-domestic rates collected in Wales go to sustaining those services on which businesses depend. The pavements on which their customers walk, the roads on which their customers drive to their businesses, the people who work in their businesses who are educated at the expense of the state, the national health service that provides for those employees when they are ill—all those services are available to businesses, and that’s why business rates are paid.

I accept what you say, Minister—thank you for taking the intervention—about the revenue raised in taxation and the way that is spent, but of course, what we’re facing here is some communities being disproportionately hit by a significant increase, and not seeing any significant increase in their local services as a result of that additional taxation. Do you accept that that in itself causes a lot of disgruntlement amongst those business owners that are being affected by these increases?

Llywydd, of course I understand that when bills change, those people who have to pay more are much more alert to that, and not all those people have the same ability to pay. That’s why, in the next financial year, we will provide over £200 million-worth of financial assistance to businesses in Wales, a greater sum than ever, ever before. It will support more than three quarters of all ratepayers here in Wales. Our £100 million small business rate relief scheme already supports more than 70 per cent of businesses in Wales. Over half of all eligible small businesses in Wales pay no rates at all, and we’ve extended our scheme into next year and will use this year to design a permanent scheme thereafter.

Because we recognised from the very beginning that changes in Bills fall disproportionately on some shoulders, we introduced a £10 million transitional rate relief scheme at the very beginning of the process. That will provide additional support to more than 7,000 additional ratepayers, and the scheme is fully funded by the Welsh Government, unlike the scheme across our border, where people who are paying less have to give up some of that benefit in order to cushion the impact on people who have to pay more. If we did that in Wales, then the people who would be giving up their benefit would be the steel industry and healthcare centres and other businesses across Wales.

We’ve gone on listening to what small businesses, and especially high-street retailers, have been telling us over the autumn—that despite this transitional relief there are some towns and communities that are particularly affected by the revaluation. I acknowledge that Nick Ramsay has regularly raised these concerns on behalf of businesses in his constituency. There are many high streets across the country where rates are falling, but we’ve recognised that some retailers need additional support. That’s why we have announced an additional £10 million over and above what was originally proposed for additional support for high-street retailers, including shops, cafes and pubs. Once again, we will provide that money in full from Welsh Government resources, and we will deliver it through a special targeted grant scheme. The relief scheme will be very similar to the previous Wales retail relief scheme, which was administered by local authorities. It will provide a flat rate reduction in liability for eligible ratepayers. For many ratepayers, particularly those currently only eligible for partial small business rate relief, the relief will reduce their remaining liability to nil. Now, I fully understand the calls around the Chamber for full details of the scheme to be made available, and I want to do that as soon as possible. I met officials earlier this week to accelerate this process, nevertheless, we have to design the scheme within the law, we have to consult with local authorities that will be responsible for its administration, and we need to talk to small business representatives as well, to make sure that that £10 million is used to the maximum effect. That will take a few weeks longer. As soon as we are able to conclude it, I will publish a written statement updating numbers on those details, and then that money will be put to work to support those businesses as we would wish to see it—[Interruption.] Yes, of course.

I’m very grateful for the way you’ve shone light on the process that is being undertaken, and I do appreciate you have to work within the law and the regulations. When you say a few weeks, might you be able to give us an indication of how long that might be? Because I know the first question I will get is: ‘What does a few weeks mean in this context?’

I understand that, and all I can say is that I’ve committed to doing it as fast as we possibly can. Let me just tell you one dilemma, Andrew: if we work on it a bit longer, we may—and it is only may—be able to design the scheme in a way that the relief will go automatically to those who will get it, without requiring them to make an application for it. Now, I think if we could do that; that would be worth a little bit of extra time, because it will undoubtedly mean that more businesses will benefit, and will benefit automatically. The previous scheme relied on applications. We’re doing the work to see if that is possible. It may take a little bit longer, but it would make the scheme more effective. As soon as I’m in a position to do so, we will provide the details so that people can get the advantage that we wish to provide to them.

I call on Russell George to reply to the debate.

Can I thank all those who took part in the Conservative debate today? Can I also declare an interest as an owner of a small business myself who, unfortunately for me, has to pay business rates? But I would like to say that I listened carefully to Adam Price’s comments today, and I agree with all he said. Many small businesses are under severe pressure, and it takes no pleasure at all in knowing that Welsh businesses are more disadvantaged than other businesses across the UK. One way that the Welsh Government can help reduce this burden is, of course, to support small businesses, especially for those affected by the non-domestic rates revaluation. I have to say, the Welsh Government has failed to plan properly for the revaluation process, and has been slow to react.

Now, Nick Ramsay outlined in his contribution in the opening some examples of how businesses are being affected in his own constituency. I remember, in a previous debate, Nick highlighting a letter he received from one constituent inviting him to attend a closing down party, which illustrates, of course, the bleak picture that many businesses face. I thank David Rowlands for his contribution. Much of what David said was actually provided to us in evidence in the Economy, Infrastructure and Skills Committee. Andrew R.T. Davies, of course, pointed out in his contribution the petition that was handed in today by Sally Stephenson, who handed in a petition of over 1,600 signatures. Sally owns that award-winning shop in Cowbridge, The Pencil Case, which is of course severely affected by the revaluation. It was good to speak to Sally and her colleagues today. In my own constituency, Members may remember Megan Lawley of Jazz Clothing, who contributed in the video footage on the screens of the Chamber, who said, basically, if she moved her business a few miles across the border into Shropshire, she’d be paying no business rates at all. Because that’s the reality. In England, if you’ve got a business with a rateable value of under £12,000, you pay nothing at all. In Wales, that limit is only £6,000 and that’s the reality for many businesses across Wales.

Of course, also, during the Assembly election campaigns, I remember reading a press release from Labour, from Eluned Morgan, trumpeting the Labour Party pledge, when she visited The Hours coffee shop and bookshop—[Interruption.] We’ll see if Carl Sargeant is still cheering when I read this out: what the Labour Party promised was—and this is a quote from the press release—that Powys businesses will breathe a sigh of relief if Labour is returned on May 5’ because a Welsh Labour Government would cut the amount of business rates paid by small businesses in Powys.

Well, nothing, of course, could be further from the truth. It was a phoney pledge, and, as the FSB has said—and I quote them here as well—an extension of the temporary small business rates relief scheme cannot be described as a tax cut, but it’s blatantly misleading and the worst form of spin-doctoring’.

Those are not my words; those are the words of the FSB. That puts into some perspective as well why we’re not supporting the Government’s amendment b) today.

I’m grateful, of course, to the Cabinet Secretary for the scheme that he’s brought forward—the extension of an extra £10 million. That’s welcome, very welcome indeed, and, again, that’s come about as a result of pressure from businesses themselves and Welsh Conservatives. But I would say our motion today has asked for more details—[Interruption.] And Plaid Cymru as well. Our motion today asked for details of the scheme and that’s not been brought about today. Now, I note that the Cabinet Secretary says he needs a few more weeks, but the revaluation was known about a long time ago. There was plenty of time to work up this in advance. But that’s not come forward, and that’s a result of lack of planning and a lack of interest in small businesses from the Welsh Government.

So, I do hope today that the Welsh Government will bring forward quickly, as soon as possible—because, as Nick Ramsay said, businesses need that information in order to take forward their own planning, leases and so forth, as well. So, I’d urge the Welsh Government to bring that forward as soon as possible.

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] I will defer voting under this item until voting time.

Voting deferred until voting time.