The next Welsh Conservatives debate is on small businesses. I call on Paul Davies to move this motion.

Motion NDM8151 Darren Millar

To propose that the Senedd:

1. Notes that Small Business Saturday will take place on the 3 December 2022.

2. Recognises the vital contribution small businesses make in sustaining local economies, developing communities and creating jobs.

3. Calls on the Welsh Government to use the levers it has to better support small businesses in Wales.

Motion moved.

Diolch, Llywydd. I'm pleased to move the motion, tabled in the name of my colleague Darren Millar. As Members will be aware, next Saturday is Small Business Saturday, and it gives me great pleasure to open a debate on the importance of small businesses to Welsh communities and the economy. Now in its tenth year in the UK, Small Business Saturday returns with a mission—to support and celebrate the UK's 5.6 million small businesses, particularly as they face mounting economic challenges this winter. According to the Federation of Small Businesses' small business index, almost 35,000 small businesses in Wales are expecting to downsize, close or sell their business in the coming months. Therefore, I do hope that Members will support the campaign by visiting a small business or promoting a small business in their constituency or region, to help raise awareness of the benefits of buying local.

Today's motion rightly recognises the vital contribution small businesses make in sustaining local economies, developing communities and creating jobs. In Wales, small businesses make up 99.4 per cent of businesses, contributing 62.4 per cent of private sector employment and 37.9 per cent of turnover. But they are so much more than small enterprises. They are vital components of our communities and fundamental to our society too. The Federation of Small Businesses report, 'SMEs as the key to rebuilding Wales's economy and communities', makes it clear that, in times of crisis or need, small businesses are there at the forefront of their communities, bringing skills, capacity and capabilities to bear on social challenges. And that's entirely right. Small businesses are very much agents of social change, and we see that right across Wales, where businesses are doing incredible things to support local projects and good causes.

Therefore, it's vital that Governments at all levels are working together to best support our small businesses and provide them with the conditions they need to help them flourish and grow. The Welsh Government must look at how it can reduce the business rate burden here in Wales, through measures such as the reinstatement of the 100 per cent rates relief holiday, for example. We know that Welsh businesses pay the highest business rates in Great Britain, and that business rates are one of the top costs for small businesses. That's why the Welsh Government must ensure that its business rates position is not one that is regressive, but instead supports aspiration and business growth. The next non-domestic rates revaluation will take effect on 1 April 2023, based on property values as of 1 April 2021, meaning that the rateable values should reflect the impact of the COVID pandemic, as well as changes in the tax base since the last revaluation. And so, I hope the Welsh Government will use this opportunity to really reflect on the difficulties that the rates system is having on small businesses, and take the opportunity to make some positive change.

Of course, cost-of-living pressures are really hitting small businesses hard, and I know the Welsh Government has provided some support to help SMEs in Wales relaunch, develop, decarbonise and grow, to help drive economic recovery. That support is, of course, welcome, but businesses are telling us they need more support. The recent Economy, Trade and Rural Affairs Committee report on cost-of-living pressures made it very clear that the Welsh Government needs to intervene financially to help businesses weather the current cost-of-living pressures in order to protect high-quality jobs. This could either be in the form of grants to the worst-affected businesses, or indeed as low-cost loans to support efficiency and sustainability projects. And so, perhaps, in responding to this debate, the Deputy Minister will tell us more about the actions being taken to address the recommendations laid out in that report.

Llywydd, small businesses are already reporting a rising cost of labour and skills shortages, and the Welsh Government must think innovatively about how we can best address this. It's crucial that employers, training providers and policy makers all work together to ensure the skills system delivers for individuals, businesses and the Welsh economy. I sincerely hope that the Welsh Government prioritises skills as an area that warrants much more time and attention going forward. Wales's small businesses are the lifeblood of our country, showcasing the very best of our nation, our innovation, our community cohesion and our people, and so this Small Business Saturday, I hope all Members will take the opportunity to celebrate our small businesses and show their support for this campaign.

The resilience of small businesses continues to be tested, and it's vital that the Welsh Government does whatever it can to lessen the burden and support our Small and medium-sized enterprises. Whether that's having a cuppa in a local cafe, buying an early Christmas present from a small shop or visiting your local butcher, there's a small business out there that needs our support. In my own constituency, I continue to be impressed with the high-quality produce that's on offer by many businesses, and I know that Members representing areas right across Wales feel the same. So, this Saturday, let's all redouble our efforts and champion our SMEs by buying and promoting local businesses. I urge Members to support our motion.

As we approach Small Business Saturday, we have to recognise that we're in the middle of the worst cost-of-living crisis for 40 years. The impact on our small businesses will be severe. This is one of the main economic concerns facing small businesses at present, with 89 per cent of companies noting higher costs than a year ago. Small businesses won't have the reserves that bigger businesses have, and very often, they'll face higher costs because of their size. The impact will be worse on the Welsh economy compared with other places, as a result of a relatively higher number of small businesses. However, we have a unique opportunity here to tackle the cost-of-living crisis and the climate emergency at the same time and create an economy for the future. Small businesses are eager to help. They're eager to help reach the climate targets, but 76 per cent felt that they needed more support from the Welsh Government in this area. The Welsh Government should ensure that funding is available for the setting of solar panels and improving building fabrics, especially in the energy-intensive industries. This would not only reduce the costs for businesses and safeguard them better from changes in the energy market, but it would also help to deliver our net-zero targets and move to a greener economy.

Llywydd, no contribution to a debate on small businesses in the run-up to Small Business Saturday would be complete without me taking the opportunity to highlight some of the fantastic local businesses in my region. Last year, I told Members about where I get my hair cut; well, different to last year, I now get my hair cut in Dappa Chaps in Pencoed by a fantastic barber called Fletch—no relation there whatsoever. But Dappa Chaps, alongside Mia Bella nail salon, did Pencoed proud in the Welsh beauty industry awards, both winning awards. Congratulations, of course, to both. [Interruption.] Go for it, Jack.

I'm not going to speak about haircuts now, and I don't get my nails done. But it's not just nail salons or barbers or hairdressers, it's actually things like tattoo shops, and I can tell you that I got my tattoo for the world cup in Purple Moon tattoo studio in Connah's Quay. Will you join me in congratulating those types of businesses as well?

Of course, I'm more than happy to join you in congratulating them. Members will also be glad to hear that I still go to the Sandwich Co, another fine business in Pencoed, and, yes, I still order the Arnie sarnie. I'm a creature of habit after all. But for those who wish to sample a wider menu and are excited for Christmas, then please do try the Christmas cracker—turkey, stuffing, sausage, cranberry sauce, crispy bacon, shredded sprouts and the option to add pigs in blankets. #Dimproblem.  

Another habit of mine, as I walk into the office from the train station, is to stop in Beat bakehouse at the bottom of Station Hill for one of the best coffees in Bridgend. I'm sure the Tories opposite would be delighted to know that they are taking over Suzy Davies's old office. I can't speak to what the quality of the coffee in Suzy's office was like, but I would wager that the coffee has improved substantially. Of course, no coffee is complete without a doughnut, and Whocult still remains for me the king of doughnuts. Since I last updated Members on Whocult, they've expanded substantially and are going from strength to strength.

Finally, Llywydd, as we head into Christmas, you might want to buy a gift for the Dirprwy Lywydd. Could I suggest looking to his constituency and getting him something from San Portablo, a clothing shop in Aberafan shopping centre that takes pride in Port Talbot? Small businesses are our communities. Yes, support them on Small Business Saturday, but also support them throughout the year.

I'm grateful for the opportunity to contribute to this debate and to highlight the vital importance of small businesses to our economy and also to our communities. In a fast-moving world where businesses will all seek the best opportunities, large companies have the advantage of being able to relocate to other regions and even other countries to take advantage of the tax breaks and other incentives should they so wish. In contrast, small businesses are embedded in the communities that they serve, and I've heard from many of my colleagues here today that they're supportive of that as well. For me, they're a vital part of the Welsh economy, providing jobs for over 62 per cent of the total workforce in enterprise employment here.

Small Business Saturday is about highlighting the importance of small businesses within their communities and to encourage more people to shop locally. But, before I talk about some of the issues they face, I wish to take this opportunity to praise the courage of those risk takers who decide to set up their own business in the first place, because it's certainly not easy. Once upon a long time ago, I wanted to set up my own cosmetics business, and the sheer investment was simply eye-watering for me, and it was an idea that I had to drop. The standard definition of an entrepreneur is, and I quote,

'a person who sets up a business or businesses, taking on financial risks in the hope of a profit.'

Risk takers in the business world risk their livelihoods, reputation, and even personal relationships to achieve their so-called end goal. From creating an app, to opening a shop, to launching a new brand, the fact is that all entrepreneurs have taken huge risks when deciding to set up their own business. For aspiring businessmen and businesswomen, the thought of eventually being your own boss in the long term outweighs the potential risks of failure. Entrepreneurs take calculated risks every single day, but possibly none is bigger than the initial decision to start a business in the first place. I believe, sincerely, from every ounce of my soul, that the Welsh Government should do all it can to support those risk takers and encourage small businesses to grow and to thrive. That means taking action on business rates. Business rates, rents and wages are the three largest outgoings for any small business. At a time when small businesses face unprecedented increases in their costs, as my colleague Paul Davies mentioned, politics aside, the Welsh Government should really follow the lead of the UK Government and provide further business rate relief. This would provide timely help to allow companies to focus on expanding their business and take on new staff.

Presiding Officer, this year marks the tenth anniversary of Small Business Saturday. It's a great opportunity to highlight the vital role small businesses play in their communities and, essentially, in creating jobs. But, we should also recognise and applaud the courage and enterprise of those who decide to set up their own businesses, because without them, we would be all the much poorer. Thank you.

Meeting small businesses is always such an honour, isn't it, as a representative. Certainly, speaking to many last weekend around Pontypridd, the challenges that they're facing are astronomical in terms of those prices, still with COVID recovery. But also, because people have less money, there's less spend in those shops, and it is hugely, hugely challenging. 

Another challenge for areas like Pontypridd—and this is true for many, many communities across Wales—is the challenge if they also face the fear of flooding. Many of you will recall in February 2020 the images of Pontypridd town centre under water, and many, many other communities. Of course, homes were devastated, but for those businesses it's incredibly challenging if not impossible now to be able to have insurance. If you're in an area affected by flooding and you have a house, you're able to access insurance via the Flood Re scheme, but no such scheme exists for businesses. Therefore, when we are considering in light of the climate emergency and knowing that the future of town centres like Pontypridd is going to be under threat, I would also like to ask the Government to consider, in terms of the levers to better support small businesses, what we do to support those businesses that cannot have insurance and that, if there is an option of insurance, cannot currently afford insurance, because this is then impacting them if anything goes wrong with their business in terms of their resilience. [Interruption.] Sam.

Diolch. I'm grateful to you for giving away. I've challenged the climate change Minister on this exact point, because on the Quay in my constituency of Carmarthen West and South Pembrokeshire, businesses such as Quayside Orthodontics and Towy Works have suffered flooding. So, do you agree with me that businesses should be treated equally to residential areas when it comes to flood protection?

Certainly. I completely agree with you. Seeing the devastation of those businesses—. Clwb y Bont only just recently reopened its doors. I was asked, on the day that it was opened, 'Is Clwb y Bont safe in the future, now?' Well, no, it isn't. If there's a small flood, yes, because there are flood protection gates there, provided through funding, but it wouldn't have helped if we'd have seen the amount of water that came during that fateful night.

I think for many, many businesses, they are still traumatised now by having experienced floods and, in some instances, having suffered multiple floods. I think Sioned Williams recently relayed, in terms of her region, in terms of that example. So, I think we do need to look, in terms of resilience; it's not just the economic situation. But in light of the climate emergency, we need to do everything possible because small businesses and our town centres are what make communities. It's where people come together, it's where we are able to meet, enjoy and have a key role to play in terms of our climate emergency response. So, I'm very happy to be able to support this today, but also to put that plea, in terms of, please consider also those businesses that are at risk of continued flooding. They need our support as well.

Businesses are up and down in my constituency, and they play a huge part in my community. I'd like to list them all, as Luke Fletcher did, but after my contribution last year, I had some e-mails from people who were quite upset that I didn't mention them, so I think it's probably best that I don't. Just to say, there are a number of businesses, north and south, east and west in my constituency, and they provide services, they create jobs, they create wealth and, in many cases, they are the social hubs of communities. There are a number of small businesses in the area that do that, and I was fortunate to go to the Powys business awards in Brecon barracks the other week, and it was fantastic to see so many businesses right across Powys that do an absolutely fantastic job of promoting Wales and promoting our area. And these are run by hard-working people who pour their life and their soul into these businesses. They're not hugely wealthy corporations and they don't have a huge amount of cash behind them, but they are hard-working people who provide jobs and important services, and it is those jobs for those local people that do support our local families. That's why it's crucial and it's important that our small businesses are supported, not just by the Welsh Government, but the UK Government as well, and all Governments right across the country in what is becoming an uncertain world, due to rising energy costs and commodity costs.

But there are concrete things that the Welsh Government can do around business rates, and I would like to see business rates lowered here in Wales to make our businesses more competitive, because many businesses that I speak to in my constituency say that they're at an immediate disadvantage to other parts of the UK and it also is driving people out of the high streets, because they simply cannot afford the rates that they have to pay. And I would like Welsh Government Ministers to recognise the wealth production and the job creation that these small businesses have, because they are the lifeline for many of our communities. Without these small businesses on our high street, they will simply die, and I'm sure that that's something the Deputy Minister doesn't want to see, that's something that I don't want to see, and I'm sure that nobody across this Chamber wants to see our high streets becoming an area where nobody is going and they just become derelict and deserted.

But what I want to see is more businesses; I want to see more of them being set up, more opportunities, more grants, more availability, more shops coming online for people to actually access these businesses. Because when business thrives, our public services thrive, because without their help to contribute to the economy, we cannot have the vital public services that all need. So, I would encourage every Member in the Chamber to get out and support Small Business Saturday and do your shopping there—ditch Amazon and join the high street.

I call on the Deputy Minister for Arts and Sport, Dawn Bowden.

Diolch, Llywydd. I do very much welcome this debate to note the importance of Small Business Saturday and to, of course, recognise the vital contribution that small businesses make in sustaining local economies, developing communities and creating jobs. And as others have already said, SMEs are the lifeblood of the Welsh economy and make up over 99 per cent of Welsh businesses, accounting for almost 63 per cent of total employment.

And we could all show our support for local businesses by giving them our custom, and events such as Small Business Saturday are an important reminder that, by shopping locally, we can directly support our SMEs and ensure that a proportion of our money is invested straight back into our local economies. That's something that I've been doing in my constituency, as I know other Members have been, and what I will be doing in highlighting and promoting that this weekend. Like James, I'm not going to go down the road of listing all the wonderful businesses in my constituency, other than the hairdresser called Hairport that's been turning my hair purple over the last few months. But this also includes supporting our social businesses in Wales that do form a dynamic, diverse sector, which has demonstrated considerable growth over the last few years. Currently, there are 2,309 social businesses identified in Wales, which employ an estimated 59,000 people, and it's important that we learn from the values and the principles of social enterprises and co-operatives that have helped us through the pandemic to build that fairer, greener and more prosperous tomorrow, and that was something that was set out by Cefin Campbell in his short debate last week.

Now, I am proud of our track record in developing a strong entrepreneurial culture, and entrepreneurship and innovations are key to growing the economy in Wales. We're committed to nurturing entrepreneurial spirit in our small business owners and future generations, supporting the introduction of innovative technologies, new products and services to help businesses remain competitive, create jobs, and capitalise on opportunities arising to grow their businesses. Through Business Wales, the Welsh Government is actively focused on engaging and supporting our microbusinesses and SMEs, particularly those that are grounded in their local communities and are invested in Wales for the long term. That's why we are investing £20.9 million from 2023 to 2025 in our Business Wales service, to continue to ensure that businesses have access to the information, guidance and business support that they need to start, to grow and to prosper. This will build on the success of the Business Wales service that we've seen to date.

Will you take an intervention, Minister?

Indeed.

I'm grateful to you for taking the intervention. It's accepted from across the Chamber that we all celebrate small business this Saturday, but sadly, today in the news—just reading it now—HSBC have confirmed 114 bank closures. If I think of my own local town of Cowbridge, one of the branches is there. There will not be a single high-street branch on the high street now, there won't be. Have you a view on that announcement, and in particular, what the Welsh Government might be able to do to obviously try and encourage banking opportunities for as many small businesses to access and replace the loss of service?

It is a very real problem, Andrew, and I have it in my own constituency. There is not a single high-street branch now in the upper Rhymney valley, and we've now had to rely on mobile branches. So, Lloyd's Bank bring a mobile branch to Rhymney. I think, potentially, the answer is to look at a more hub-type of model for branches that can move around, but that is something that we really do need to discuss with branches, because there are so many people who don't have access to banking facilities; they don't all use internet banking, so we have to find some way of doing that. So, I am very sorry to hear that announcement, and we do need to try to find some solutions to that.

What I would say, however, is from the £20.9 million that we are investing, that is building on the success of Business Wales that we've seen to date. Since 2016, Business Wales has advised over 45,000 individual entrepreneurs and businesses, helping to establish almost 800 new enterprises and supporting businesses to create 32,500 new jobs. In terms of value for money, we know that every £1 invested in Business Wales can be linked to a minimum £10 and up to £18 of net GVA uplift per annum. And those businesses that have received support have a 77 per cent survival rate over four years, compared with the unsupported average of 33 per cent.

Now, the Welsh Government is also supporting small businesses with its small business rates relief scheme. And while we are doing all that we can to support small businesses, it is crucial that the UK Government honours its commitment and works to add value to Welsh Government interventions and to use the levers that it has to better support small businesses in Wales. Through the economic mission, we are taking bold action to support stronger local economies and the essential job of tackling poverty. And I hear what Heledd Fychan has said about flooding and the inability of local businesses to get insurance for that, and that is certainly something that I will talk to my colleagues, the Minister for Climate Change and the Minister for Economy about, although I can obviously make no guarantees on that one today.

But we are also using our procurement levers to enable small businesses to benefit from public sector procurement opportunities. Billions of pounds-worth of contracts are advertised through Sell2Wales, and through collaboration with public sector buyers, Business Wales encourages our small businesses to develop their tendering capabilities to win more business. Through a wider commitment to improving supply chains, we support businesses to sign up to the ethical supply chain code of practice, and we are committed to the benefits of procurement levers and are putting social partnership on a statutory footing through the Social Partnership and Public Procurement (Wales) Bill. 

So, Small Business Saturday is a great initiative to shine a light on the importance of supporting the retail and hospitality sectors, which, of course, are key parts of the foundational economy. So, I'm supportive of the motion that has been proposed, and we'll continue to do all that we can to support micros and SMEs here in Wales, and I would encourage everyone across Wales to shop locally and to support our independent small businesses, not just on Small Business Saturday but throughout the year so that we can retain and grow local wealth in communities across Wales. Diolch yn fawr. 

I call now on Sam Rowlands to reply to the debate.

Diolch, Llywydd, and can I say what a pleasure it is to close today's debate on small businesses, ahead of Small Business Saturday, of course, which is taking place, as we heard, this weekend? As outlined by Paul Davies in opening today's debate, this will be the tenth year in which we mark Small Business Saturday and celebrate with our counterparts across the United Kingdom the 5.6 million small businesses, of course with the best of those being here in Wales. I'd like to firstly thank Members from across the Chamber and the political divide for their contributions today, along with the cross-party support that this motion has received here today as well.

In closing today's debate, I'd like to focus on three key themes that I think have been picked up from Members across the Chamber. The first point that has shone through is the sheer importance of small businesses to the Welsh economy and to our local communities, highlighted in point 2 of today's motion. And as highlighted by Paul Davies in his opening contribution to today's debate, and by the Deputy Minister in closing earlier on as well, small businesses in Wales make up a whopping 99.4 per cent of all businesses, contributing 62.4 per cent of private sector employment and 37.9 per cent of turnover—a really significant part of our economy. And it's been clear through the debate today that, not only are they playing that part in terms of our economy but also play an important role in our local communities. And Members have highlighted that, in times of crisis or in need, small businesses are often at the forefront of our local communities and tackling many of the social challenges that we see around us. And small businesses do so much in showing the very best in our local communities. I've enjoyed the shameless name dropping from some Members from across the Chamber, outlining some of their favourite small businesses in their patch. 

The second point that has been picked up by Members—and Heledd Fychan pointed it out in particular—are the number of challenges that are facing small businesses up and down Wales. And, regretfully, as we know and as outlined by Natasha Asghar and James Evans, businesses in Wales pay some of the highest business rates in the whole of Great Britain. In addition to this, Luke Fletcher pointed out the current cost-of-living challenge hitting our small businesses hard, and then Heledd Fychan, again, in particular focused on the challenges that some of those seeking insurance are finding at the moment hindering, perhaps, their businesses at the moment. This is why we certainly need to see further support provided to small businesses.

And, as a final point in my contribution this afternoon, James Evans, again, pointed out how crucially important it is that we remember that businesses are not the enemy. We need to do our utmost to support them. That's why I'm looking forward to seeing many Members from across the Chamber visiting those small businesses or promoting theirs in their constituencies and regions over this weekend. Point 3 of our motion states that Welsh Government does need to use all of its levers to better support small businesses in Wales, and it was highlighted by Paul Davies, again, that around 35,000 small businesses in Wales are expected to downsize or even close in the coming months. And, Deputy Minister, I was pleased to hear of some of the schemes and initiatives that Welsh Government are seeking to take and have taken over recent years, but it's clear to me, more than ever, that one of the most significant things that Welsh Government could do is to look at reducing that business rate burden, which would put money back into the businesses on our high streets.

So, in closing, Llywydd, as Members from across the Chamber have outlined, small businesses are crucial to the Welsh economy, crucial to our local communities. Now is the time to do everything we can in supporting them and providing an environment for them to flourish in. I thank Members for all their contributions today, and I look forward to their continued support. Diolch yn fawr iawn.

The proposal is to agree the motion. Does any Member object? There are no objections. Therefore, the motion is agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.

That brings us to voting time, and unless three Members wish for the bell to be rung, I will proceed directly to the vote.