Senedd “consensus” reached on business rate reform



(Title Image: Orpington First)

The Issue

As you probably all know, over the last 18 months or so a revaluation has taken place for business rates (officially known as non-domestic rates), which is some cases has resulted in massive rate rises for some businesses – particularly those in upmarket but small, semi-rural towns. While the Welsh Government has instituted a rate relief scheme, it’s unknown how long it will last as high streets across the country struggle in a competition with internet shopping and out-of-town retail parks.

UKIP used their allotted time slot to debate the issue yesterday (11th October) and pretty much reached a consensus with all of the other parties.

The Motion

The Senedd agrees that:

  • The current business rates regime disadvantages retailers in small towns and cities.
  • Business rates are inherently inequitable because they bear little, if any, relation to business profitability; reducing the impact of business rates would help businesses survive the challenges posed by internet shopping and boost the high street.
  • As an interim measure, pending the replacement of business rates, premises with a rateable value below £15,000 should be exempt and the rates of business properties within the band of £15,000 – £50,000 are reduced by 20%.
  • Welsh local authorities should encourage local trade by offering 60 minutes free parking in town centre car parks.
  • Out-of-town shopping developments should bear a greater but reasonable share of the burden of business rates, and such rates should apply to their car parks.

Key Points

Caroline Jones AM (UKIP, South Wales West)
For (the motion): Business rates are unfair.

  • A replacement for business rates should be introduced in the longer-term, with rate relief used in the short-term.
  • Without small businesses, high streets threaten to become “empty shells”, 1 in 8 retail units are empty.
  • Business rates are inequitable as they bear no relation to the profitability of the business itself.
    VAT thresholds should be raised by the UK Government after Brexit.

Nick Ramsay AM (Con, Monmouth)
For: The Welsh Government has the power to do something.

  • Full devolution of business rates gives the Welsh Government an opportunity to act.
  • The Welsh Government haven’t acknowledged the sense of urgency amongst retailers.
  • The way the revaluation was handled caused great concern.

Adam Price AM (Plaid, Carms. E & Dinefwr)
For: There’s cross-party agreement on the need for reform, if not on the details.

  • The Senedd is constantly returning to the subject of business rates reform, but nothing ever happens; it’s an “anachronistic, discredited tax”.
  • Welsh Government proposals for a new round of rate relief are “disappointing”.

Michelle Brown AM (UKIP, North Wales)
For: Business rates inhibit economic growth.

  • Business rates should be based on profit or turnover, not the value of the building.
  • Business rates disincentivise start-ups because they’re lumbered with bills from day one.

Welsh Government Response

Leader of the House, Jane Hutt (Lab, Vale of Glamorgan)

  • Business rates contribute more than £1billion a year in funding; it’s right businesses contribute their fair share.
  • The revaluation was carried out independently of the Welsh Government and they had no control over it.
  • £200million has been made available to offset the impact of rate rises; over half of eligible businesses pay no rates at all. A permanent rate relief scheme will come into force from April 2018.
  • A microbusiness loan fund has safeguarded or created 1,747 jobs.
  • The Welsh Government are actively considering options for a long-term replacement for business rates.

Vote

Now, here’s where things get complicated and it’s part of the reason why many people don’t pay much attention to these opposition debates.

Despite the broad consensus in the debate itself, because each of the parties wanted their own amendments added or others deleted, ultimately it was the softer-worded Welsh Government-amended motion that was passed by 25 votes to 22.

  • 14
    Shares