The Senedd has rebuffed calls for the Welsh Government to reverse plans to slash business rates relief for the retail, hospitality and leisure sectors.
Peter Fox led a Conservative debate, raising concerns about business rates relief falling from 75% to 40% under Welsh ministers’ draft 2024-25 spending plans,The Monmouth MS urged the Welsh Government to use money from Westminster to support businesses and protect jobs by keeping the 75% rate.
Mr Fox warned that businesses in Wales will pay almost twice as much in non-domestic rates than if they were based in England.
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The former leader of Monmouthshire County Council told the chamber it is vital Welsh businesses are not penalised and disadvantaged.
He said: “For years, businesses in Wales have been disadvantaged by the highest business rates in Great Britain, with both small and large businesses paying the same rate – both of which are higher than the rate that small businesses pay in both England and Scotland.”
Luke Fletcher, for Plaid Cymru, urged ministers to move away from non-domestic rates, saying the system simply does not work and has not moved with the times.
He called for greater flexibility to ensure, for example, that out-of-town shopping centres and supermarkets pay more into the system.
The South Wales West MS also raised concerns about an imbalance between brick-and-mortar businesses and those that operate online.
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Janet Finch-Saunders quoted Kate Nicholls, the chief executive of 海角视频Hospitality, as saying the trade body is seeing a 10% higher business failure rate in Wales.
The Conservative MS for Aberconwy accused Labour and Plaid Cymru of being “busy brainstorming novel ways to bankrupt our businesses”.
She said: “This represents nothing more than gross negligence, a shambles of a budget that is a death sentence to many businesses.“
Hefin David, a Labour backbencher who represents Caerphilly, highlighted the wider context of 14 years of austerity and soaring inflation.
He criticised 海角视频 Government tax cuts at a time when public services are “on their knees”, highlighting the International Monetary Fund’s call for a spending boost.
Dr David said the Welsh Government is prioritising the NHS, social care and schools: “The only way you can have functioning public services – I don’t even mean world-class or good public services, but functioning public services – is if those budgets are protected.”
Finance Minster Rebecca Evans said business rates raise £1.1bn a year – a non-trivial contribution to the funding required to sustain public services.
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She said the Welsh Government has had to make difficult decisions to refocus funding towards core front-line services but still provides £384m in rates support.
Ms Evans pointed to ministers’ decision to cap inflation of the multiplier at 5% next year, adding an additional £18m recurring cost to the Welsh budget.
She told the Senedd: “We’re also investing £78m to provide that fifth successive year of rate relief for retail, leisure and hospitality businesses in 2024-25.“And let’s remember that that was always a temporary scheme.”
Ms Evans said the Welsh Government continues to explore the idea of land value tax as a possible long-term replacement for non-domestic rates.
The Tory motion was voted down, 14-36, following the debate on January 31. While Plaid Cymru and Welsh Government amendments were agreed, the motion as amended was not.
- Chris Haines is a ICNN Senedd Reporter.