The Senedd has voted against a proposal from the Welsh Conservatives to eliminate business rates for small businesses across Wales. This decision comes amid ongoing concerns about the viability of high streets, where rising costs are seen as contributing to a wave of closures affecting local shops.
During the debate on December 10, 2023, Conservative members urged the Welsh Government to abolish business rates for the smallest enterprises to provide them with necessary financial relief. Samuel Kurtz, the Conservatives’ shadow economy secretary, highlighted that Wales currently has the “least competitive” business rates in the UK, coinciding with the highest unemployment and lowest take-home pay in the country. He expressed concern over what he described as an “economic doom loop” following the UK’s autumn budget.
Kurtz articulated the challenges faced by small businesses, stating that many have seen their property valuations increase significantly. He recounted a conversation with a business owner whose projected monthly rate bill would rise by £8,000, a burden he deemed “unsustainable.”
In contrast, Luke Fletcher, shadow economy secretary for Plaid Cymru, acknowledged the introduction of differential multipliers for high-street shops but criticized the exclusion of the hospitality sector from the lower rate multiplier. He noted that this oversight costs typical pubs an additional £6,800 annually. “To not include hospitality… was a massive misstep by the government,” he remarked.
The debate also saw contributions from independent member Rhys ab Owen, who pointed out that Wales has experienced the highest percentage of small business closures since 2020. He suggested that a reduction in VAT for hospitality businesses could alleviate some pressures on the sector.
Amidst these discussions, Conservative member Joel James highlighted the dire state of high streets, attributing the struggles to the Labour UK Government’s increase in national insurance contributions. His colleague Gareth Davies painted a grim picture, stating that a pub closes every day and that small businesses are being “suffocated” by stringent policies.
In response, Rebecca Evans, the economy secretary for Wales, defended the government’s record, asserting that the economic environment has improved, despite the challenges posed by inflation. She emphasized existing support measures, stating, “Our small business rates relief scheme provides over £140 million of relief annually to around 70,000 properties across Wales, with over 50,000 receiving 100% relief and paying nothing at all.”
The Conservative motion, which also called for free parking in town centres and the reversal of tourism tax plans, was ultimately rejected by a vote of 34-12, with one member abstaining. Amendments proposed by both Labour and Plaid Cymru were also voted down, leaving the Senedd without a consensus on how to address the challenges facing small businesses in Wales.
