Item 9 on the agenda is the Non-Domestic Rating (Multiplier) (Wales) (No. 2) Order 2018, and I call on the Cabinet Secretary for Finance to move the motion, Mark Drakeford.

Motion NDM6894 Julie James

To propose that the National Assembly for Wales, in accordance with Standing Order 27.5:

1. Approves that the draft Non-Domestic Rating (Multiplier) (Wales) (No. 2) Order 2018 is made in accordance with the draft laid in the Table Office on 7 November 2018.

Motion moved.

Thank you very much, Deputy Presiding Officer. I propose the motion to approve the Non-Domestic Rating (Multiplier) (Wales) (No. 2) Order 2018. This sets the multiplier for non-domestic rates for 2019-20. Last year, the Welsh Government outlined its intention to change the inflation measure used to calculate the multiplier in Wales from the retail price index, RPI, to the consumer price index, CPI, from 1 April 2018. For 2018-19, this was done by an Order, which was approved by this Assembly in January. This Order sets the multiplier for 2019-20 on the same basis. The Order needs to be approved before a vote can be held on the local government financial reports and the local government and police settlement for 2019-20. The impact of the Order will be to limit the increase in all non-domestic rating bills for 2019-20. Businesses and other ratepayers in Wales have already benefited from savings of around £9 million through our use of CPI for 2018-19, and they will benefit by an additional £22 million in 2019-20. We intend to continue to use the same methods in ensuing years.

I am grateful to the Constitutional and Legislative Affairs Committee for considering the multiplier Order and for making it possible for us to discuss it today. The committee raised a merits point on the figure for B, which is noted in the Order and in the explanatory note, but not in the explanatory memorandum. Although an explanation of the figure is included in the explanatory note, I do accept that it would have been useful to have included the actual figure in the explanatory memorandum to make the impact of the Order clear. We will deal with this merits point in further Orders.

This change will assist businesses and others who pay rates in Wales and will provide a sustainable and stable tax revenue for local services. The change has been funded in full by the Welsh Government and there will be no impact on the funding provided for local services. I therefore seek Members’ approval for this Order today.

Can I extend my congratulations to the Cabinet Secretary on his election as the leader of his party?

It is to be welcomed that the Welsh Government has decided to use the £26 million budget consequential from increased spending by the UK Conservative Government to extend its high street rates relief scheme for a further year. But this only, of course, represents a temporary fix to the pressure facing small and medium-sized businesses in Wales. Sadly, what we do have before us today is the most expensive rate multiplier in Great Britain. This will increase, I think, the burden on SMEs, and no amount of temporary rate relief can counter that fact, coupled with a very low permanent business rate relief of 100 per cent for rateable values under £6,000. Welsh businesses will face a poorer deal than their counterparts in Scotland and England. I hope the Cabinet Secretary can therefore explain why he is reluctant to adopt what I and colleagues on these benches have been calling for: the wholesale reform of the business rates system in Wales and 100 per cent rate relief for those with a rateable value of up to £15,000. The point I would make is that the UK Government set out a business tax road map in March 2016 to give businesses clarity on its plans for business rates up to and beyond 2020. This includes more frequent business rates revaluations within at least a three-year interval.

I wonder if you do acknowledge that, without taking these steps, your Government will be presiding over a country that is fast becoming the least competitive country in the UK. What Wales needs now, more than ever before, is a fresh approach by first understanding that businesses, and investing in businesses, lead to opportunities for jobs, regeneration and, ultimately, a higher tax return for the Government.

The First Minister said today that one of the greatest challenges of the Welsh economy would be to ensure that small businesses want to and are able to grow into major companies, and I agree with him. But higher business rates and a higher rate multiplier are going to prevent those small and medium-sized businesses from expanding further. So, we are unable to support the Government today, as the Order leaves business owners strangled by the Welsh Government's outdated business rates regime.

I call on the Cabinet Secretary for Finance to reply.

I thank Russell George for what he said in opening. I struggled to follow, Dirprwy Lywydd, how most of the rest of what he had to say related to the non-domestic rating multiplier Order in front of the Assembly, which has the effect of lowering bills that businesses would otherwise be facing in Wales—because it uprates business rates in line with CPI rather than RPI, and that will put £22 million back into the pockets of businesses next year—if this Order were not passed. In fact, I disagree with almost everything the Member said from there on in. We are ourselves committed to more frequent revaluations. I would very much like to be able to give greater certainty on the £26 million I announced at the end of last week to Welsh businesses, but his Government only provides a budget for Wales for next year, and next year alone. Had we the same certainty as the Chancellor was able to offer in England, then I would have been able to have extended the same certainty to businesses in Wales.

The nature of our business community is different, the nature of our rating revaluations is different. We provide a system in which the real-terms contribution from non-domestic rates in Wales has not risen for a decade. The only thing that has risen is the amount of help going from the taxpayer to those businesses to help sustain them here in Wales.

The Order in front of the Assembly this afternoon is a relatively small but important contribution to that, and I hope that Members will indeed support it.

The proposal is to agree the motion. Does any Member object? [Objection.] Therefore, we defer voting under this item until voting time.

Voting deferred until voting time.