Business rates (Kirsty Williams AM )

Cymraeg
English

Kirsty Williams AM <info@kirstywilliams.org.uk>

Business rates

December 3, 2009 12:00 AM
By Kirsty Williams AM in Mid Wales Journal Friday27th November 2009

Our many small and local Mid Wales businesses are crucial to ensuring that we make an early recovery from the recession and that we emerge with an economy with sound foundations, which is fit to carry us into a strong and prosperous future. With 99% of businesses in Wales being Small and Medium Enterprises (SME's) they are not only important in serving and preserving our local communities they are also the backbone of our national economy. At a time when businesses are struggling to balance high energy bills, a shortage of cash flow, excessive red tape and a downturn in consumer confidence it begs the question why is the Plaid-Labour Government adding to these burdens with increased business rates? Business rates are the only fiscal tool the Welsh Government has control over and is therefore an essential way for them to directly help small businesses. With business rates often being a company's third largest expense, easing their burden would have a hugely positive impact.

After Roger Williams raised concerns with the Minister that the increase resulting from using a multiplier based on the Retail Price Index (RPI) in September 2008 would damage businesses, the Government announced that it would be phasing in the payments of the increase over 3 years. But any advantage from this reduction in the multiplier calculation, will be outweighed by the WAG's decision to base next year's property valuations on April 2008 valuations, rather than the 2003 rates that were used this year. Since April 2008 much has changed - we have seen a devastating slump in the housing market and in the economy. Roger Williams MP and I have been contacted by large numbers of businesses from across the constituency who will see their rates increase dramatically as a consequence; an increase not matched by a stronger market or higher profits. One local company which has managed to reduce their costs by over £117,000 to help them fight their way through the recession will now faced with a 61% increase in rates which could tip them over the edge and force them to make redundancies.

In the Assembly the Welsh Lib Dems are calling upon the Plaid-Labour Government to make a simple transfer of funds from business grants, which have been widely criticised by businesses, professionals and politicians, to business rates and so extend the Small Business Rate Relief Scheme significantly. Around £25 million could extend the scheme to all businesses with a rateable value of up to £13,000 - a considerable advance from the £6,500 threshold at present. Not only would this extend the scheme to new businesses who have never benefitted before, but it would also help mitigate the effects of the current revaluation for the 40,000 businesses who expect their rates bill to go up next year. At a time when cash flow is crucial to the survival of businesses, such a scheme could be essential in saving businesses, jobs and in encouraging entrepreneurialism.