5. How effective has business rate relief been in helping businesses in Wales? OAQ54533

The Welsh Government’s package of rates relief is providing over £230 million of support to businesses and other ratepayers with their bills this year. Half of all businesses in Wales pay no rates at all.

Thank you for that answer, Minister. Rhyl High Street and town centre have declined over the years, like many town centres in Wales. Once, it had a thriving town centre, now it looks like many of the towns that have decayed under this Government's watch. Shop owners are losing out to out-of-town retail parks, which offer free and convenient parking, and outlets that have, more than likely, been offered a discount on rent or their business rates to tempt them away from the town and into the park.

Whenever this Government is asked about business rates and business rate relief, and how it can be used better to reinvigorate the high street, you always reply that local authorities are best placed to decide how to improve town centres in their patch. That may be so, but they're not doing it. Isn't it now time for the Welsh Government to show leadership on this issue and show local authorities how they can save the town centres and preserve them, particularly for those small and medium-sized retailers that are based in the town centres and are likely to lead to job creation and thriving high streets? The review of rate relief is taking way too long. Town centres are dying while you bat away any serious scrutiny by hiding behind what seems to be an internal review. 

Well, I don't think it's fair to say that, whenever asked about this issue, I say it's for local authorities because, of course, we have Wales-wide schemes that are administered and there is no discretion to some of these schemes. So, for example, small business rates relief, that's a permanent small business rates relief scheme in Wales, providing over £120 million of relief this year. It's fully funded by Welsh Government, as opposed to across the border, where you'll find businesses subsidising other businesses. And more than 70,000 ratepayers across Wales receive assistance and, as I say, half of them pay nothing at all. That compares to a third of those in England. Alongside that, we also have our high streets and rate relief schemes. That's an additional £23.6 million available to support and enhance high streets, and we've expanded that so that it just doesn't involve shop and retail in that sense; it's expanded to pubs, to restaurants, to ensure that it supports the cafes and those other businesses that give our town centres a vibrant character. 

Where there is discretion for local authorities is in the additional £2.4 million, and that's where they have the discretion to target that support to specific local businesses or sectors that they think are particularly important to the life of their town. And I think that it really is appropriate for them to have that discretion there. Of course, rate reliefs themselves aren't going to be the panacea for all of the problems facing high streets, and that's why we have things like our loans for high streets, which is an extremely popular scheme, and that's revitalising high streets. We've got our town-centre regeneration work that is going on across Wales as well. So, there are many things that we are doing to revitalise our high streets, but I don't think any of us underestimate the challenge of that.  

It's on that point, actually. In July, you may remember, actually, that you were kind enough to write, or correspond, anyway, with Bridgend County Borough Council about their high street retail rates relief. They finally told me in July—and it was after you'd contacted them—that 90 per cent of businesses that had applied to them for this kind of rate relief had actually been successful, so thank you for contacting them. However, if the measure of success of this policy is the number of high street businesses that have either opened or stayed open, I'm not sure that you can claim success in this particular borough. So, in this review that you're doing and the evaluation of the policy, what are going to be the main criteria for success? Is it going to be the number of businesses that have stayed open, rather than comparisons with England on how many people are paying rates and so forth? And will you be comparing the effects of your particular policy with alternative policies that are being offered here by other parties?  

So, next month I look forward to bringing forward a statement to the Assembly on local government financial reform, and that's looking at local taxes in the round, so it will be looking at both council tax and also non-domestic rates. And it will be describe the research that we've commissioned across both of those areas to help us better understand what the opportunities are for more long-term reform of both of those things.

In terms of some of the ways in which we can measure success, in answer to Rhun ap Iorwerth's question earlier, we talked about how you measure value for money. Measuring value for money in just purely monetary terms is one thing but, actually, if we measure it in a more creative way, ways that seek to promote the Welsh Government's wider agenda in terms of biodiversity, for example, or our economic action plan, then I think there are great opportunities there to target investment and support. But I do think that this is a longer piece of work. Suzy asked if we'd be looking at other ideas. I'd very much welcome this consversation to be something that we can continue, to explore areas where we have common ideas and where we can share ideas.