Welsh Gov Petition Response ‘welcome but inadequate’

Sally Stephenson’s petition calling for more support for small businesses in Wales, which is due to be debated in the Senedd’s petitions committee this week, has received a response from the Welsh Government which falls short of committing to an enhanced, permanent rate relief scheme on a par with England’s.

Mrs Stephenson, a small business owner in Cowbridge, started her petition in response to the periodic revaluation of business premises which has proposed a dramatic increase in rateable values for businesses in the town. Her petition called for greater transitional relief and for a permanent rate-relief scheme similar to that which will exist in England from April onwards.

The Welsh Government has met the petition’s demand of additional transitional relief, which will provide support to businesses over the next three years, softening the transition to the high rates they will pay as a result of re-valuation. This has been welcomed by Mrs Stephenson and Vale MP Alun Cairns, but they have said that this is inadequate to protect High Streets in the medium to long term and that enhanced, permanent rate-relief is needed.

In England, businesses with a rateable value below £12,000 will pay nothing in business rates from April onwards, with tapered relief for those businesses with a value up to £18,000. High street campaigners feel that this is the necessary level of relief for High Streets such as Cowbridge, with most small businesses in the town falling within this valuation range following revaluation.

Mark Drakeford, Welsh Government Minister for Finance and Local Government, in his letter responding to the petition, has said:

“In terms of the enhanced SBRR (small business rate relief) scheme in England to which the petitioner also refers, it is important to understand that there are fundamental differences in the tax base, distribution of businesses and average rateable value in Wales compared to those in England which need to be taken into consideration when designing relief schemes.”

This has attracted criticism from the high street campaigners who say that the English rate-relief scheme will mean a Barnett-formula consequential for the Welsh Government from the UK, cash which could be used to cover the cost of the enhanced relief.

Sally Stephenson said, “To put it simply, from 1 April 2017 small businesses will be worse off in Wales under the devolved Welsh Government than they would be if they were under Westminster.

 

“The situation is even worse when compared to Scotland, where the SBRR threshold is being raised to £15k. SMEs in Wales are being left behind.

 

“During the Welsh Assembly elections last year, one of Welsh Labour's six manifesto pledges was "to cut taxes for ALL small businesses”. Now they are in government, they are doing the exact opposite. Business rates is the only tax which the Welsh Government has the power to change, yet for many it is being increased dramatically.

 

“We know from discussions in the Senedd that the Welsh Government’s justification for not raising the SBRR threshold is that they need the revenue to pay for public services. In other words, small businesses in Wales are being penalised for being located on the wrong side of the River Severn and for having a devolved government. This is wholly unacceptable.”

 

Vale MP Alun Cairns said, “Our high streets need permanent relief from the Welsh Government similar to that which will exist in England from April onwards. Their transitional relief is welcome, but this relief merely delays the implementation of business-busting rates rather than preventing them.

“For the Welsh Government to suggest that their reason for not implementing enhanced, permanent rate-relief is to do with the size of the tax-base, and thus revenue concerns, is unacceptable when considering the Barnett formula consequential cash they will receive as a result of the English policy.

“Protecting the high streets which form the beating heart of our communities should be a foremost priority for the Welsh Government. The manifest unfairness of businesses paying high rates in Wales than they would across the border in England will impact on local economies throughout Wales.”