Item 5 on the agenda this afternoon is the Non-Domestic Rating (Multiplier) (Wales) Order 2019 and I call on the Minister for Finance and Trefnydd to move the motion. Rebecca Evans.

Motion NDM7216 Rebecca Evans

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

1. Approves that the draft The Non-Domestic Rating (Multiplier) (Wales) Order 2019 is made in accordance with the draft laid in the Table Office on 19 November 2019.

Motion moved.

Diolch. I move the motion to approve the Non-Domestic Rating (Multiplier) (Wales) Order 2019. The Order sets the multiplier for non-domestic rating purposes for 2020-21. In 2011, the Welsh Government set out its intention to change the measure of inflation used to calculate the multiplier in Wales from the retail price index to the consumer price index from 1 April 2018.

For 2018-19 and 2019-20 this was effected through Orders approved by this Assembly. This Order sets the multiplier for 2020-21 on the same basis. In order to be effective, this Order needs to be approved before the vote on the local government finance reports—the final local government and police settlements— for 2020-21.

The Non-Domestic Rating (Multiplier) (Wales) Order 2019 will set the multiplier for 2020-21 using the consumer price index rather than the retail price index. The Order will result in a smaller increase in the 2020-21 rates bills to be paid by businesses and other non-domestic property owners than would be the case if the RPI figures were used. Through our use of CPI, businesses and other ratepayers in Wales will benefit by a further £10 million in 2020-21. This is in addition to the benefits resulting from the change of indexation in 2018-19 and 2019-20. Our intention is to continue with the same approach in future years.

The Local Government and Elections (Wales) Bill, introduced on 18 November, contains provisions to make the change a permanent one. I'm grateful to the Constitutional and Legislative Affairs Committee for its consideration of the multiplier Order.

Non-domestic rates are largely devolved. Using CPI rather than RPI to calculate the multiplier limits the increases in rates bills that ratepayers would otherwise face. This change will help businesses and other ratepayers in Wales while maintaining a stable stream of tax revenue for local services. The change is fully funded by the Welsh Government and there'll be no impact on the funding provided for local services. I therefore ask Members to agree to approve the Order today.

Thank you. I call on the Chair of the Constitutional and Legislative Affairs Committee, Mick Antoniw.

Thank you, Deputy Llywydd. I have a very short statement to make, because we considered this Order at our meeting on 2 December 2019 and we laid our report before the Assembly on 3 December 2019. Our report raised one merits point under Standing Order 21.3, which noted the decision made by the Welsh Government to use the lower consumer price index figure as part of the calculation of non-domestic rating bills rather than the default, and higher, retail price index figure. This mirrors the Welsh Government's approach in the equivalent Order from 2018.

Our report also notes that this Order was made under the made affirmative procedure. This means the Order, although having already been made, will not have effect unless it is approved by the Assembly and that approval must happen before the Assembly approves the local government finance report, which will take place in the new year. Diolch, Deputy Llywydd.

While we welcome the Welsh Government's decision to use the consumer price index rather than the retail price index, this will still see business rates rise for struggling businesses across Wales. Using CPI still results in a 1.7 per cent increase for business rates across Wales, and, at a time when businesses are struggling and our high street is in serious decline, the worst thing we can do is to raise business rates once more, even by any small amount. The Local Government Finance Act 2012 allows for a figure less than the retail prices index, so why then use CPI when we could have set a rate that would have frozen business rates, which would have stimulated the economy?

We welcome the fact that the increase is not as high as it could have been. However, our struggling high street and business owners across the nation still cannot afford this hike in business rates. Diolch yn fawr.

Thank you. Can I call on the Minister for Finance and Trefnydd to reply to the debate?

Thank you, Dirprwy Lywydd. The multiplier is a key component of the NDR system and it determines the level of each non-domestic rates bill and thus the overall yield generated by the system, and it's really important to recognise and reflect on the fact that non-domestic rates do provide a significant contribution to the funding of local services in Wales, so over £1 billion a year. So, we do need to remember, when we are thinking about alternative approaches for business rates, that were we to suggest that there should be cuts in business rates then we need to also suggest where those cuts might fall. So, would it be schools? Would it be libraries? Would it be social care? These are genuine questions that need to be answered. But, in calculating the increases using CPI rather than RPI, we are ensuing that ratepayers will receive a lower bill than they otherwise would have done, and, of course, Welsh Government is maintaining its commitment to business rates relief, So, this year, for example, we have a £230 million investment in local businesses to ensure that, actually, half of businesses in Wales pay no rates at all. So, Welsh Government is very alive to the pressures that businesses are facing, but we do have in place a significant programme of reliefs, which are there to help business.

Thank you. The proposal is to agree the motion. Does any Member object? No. Therefore, the motion is agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.