Part of the debate – in the Senedd at 4:56 pm on 11 October 2017.
Diolch. It’s yet another opportunity for us to discuss the reform of business rates. I mean, I’m not the only one, I’m sure, in this Chamber, to be hit by a tsunami of déjà vu. It seems a perennial in this place that we are constantly returning to this subject, and for good reason, really. This is an anachronistic discredited tax. It’s a bit like the window tax, which was repealed in 1851, but this one is still with us. And for all the reasons that Caroline Jones referred to and Nick Ramsay agreed with, it’s high time that we not just had some reform at the edges, but looked at a completely different way of approaching business taxation. Because, as we move to a situation where physical businesses, otherwise known as shops, in the retail sector in particular are facing huge challenges as we shift to online, then we are loading additional cost on to this sector, which is unsustainable, and the consequences that Nick Ramsay referred to are there to be seen in all of our town centres.
Our amendment set out the policy that we fought the election on. I mean, it goes in a similar direction. We suggested abolishing business rates for all businesses with a rateable value of less than £10,000 a year and then tapered relief up to £20,000. We disagree on some of the details, but I think the principle is clear. We also proposed exempting businesses in the first year of operation in order to encourage business start-ups, introducing a split multiplier for small and large businesses, which is the case in Scotland and in England. But this is the real one, this is the real prize, which is exploring abolishing business rates altogether and replacing them with alternative forms of taxation that do not discourage employment, town-centre regeneration and investment in plant and machinery.
Now, the Government has issued its consultation document. There are two days left, I think, for people who are keen to put their oar in, but it’s a very, very desultory, disappointing document, to be honest with you. One of the first things it says is that the new scheme will be designed within the existing £110 million annual funding envelope. So, where’s the scope for reform there? They also set out some proposals in terms of increasing the threshold for relief, but they’re incredibly modest. I mean, the only viable options, the consultation document says, are increasing the threshold of 100 per cent relief from £6,000 to £8,000. These are crumbs, really, in terms of helping the small business sector in Wales. Increasing the upper threshold for relief from £12,000 to £13,000—well, that’s going to create a transformative effect in our business sector in Wales. And, wait for it, potentially—it’s full of qualified language—increasing the lower threshold to £8,000 and the upper threshold to £13,000. Well, that’s the problem, isn’t it? That’s the lack of ambition in terms of business rate reform and in terms of economic policy in general from this Government.
There’s no mention at all in the Welsh Labour Government’s own consultation document of switching from retail price index to consumer price index indexation. That was actually in their manifesto for the general election at the UK level. No mention of exempting new investment in plant and machinery. I remember John McDonnell hailing that as a radical policy that was going to make a difference to businesses right across the land—England, of course. Yet again, a case of doing and saying one thing when it suits them politically over the border and, in the one part of the United Kingdom that they’re actually in Government, not following through on their own policy. We’re not surprised, are we, but certainly, I think, we’ve a right to be deeply disappointed at the lack of leadership in the Government. We need radical thinking. It certainly isn’t contained within the ambit of the pathetically low ambition statement that we got from the Government in terms of their consultation. We should be looking at leading the rest of the UK in abolishing this outdated tax and creating the platform upon which our businesses can thrive.