A report issued last Friday claimed that businesses in rural parts of England do less well than those in urban areas and are failing to reach their full potential.
The study, written by the Commission for Rural Communities, argued that English rural areas had up to £347 billion a year of untapped potential, and that the barriers to business development remain affordable housing and transport.
The recommendations for improving this situation include an economic minister to oversee support of rural economies, a rural finance forum to tap into private and public money and a rural innovation initiative to encourage entrepreneurs and ensure access to resources such as broadband.
Of course, what applies to rural England also applies to Wales and I would argue that the problems highlighted in the report are even more acute here in our country.
Only last week, the Joseph Rowntree Foundation reported serious problems of affordability, sharp increases in homelessness and a limited housing supply within Wales’ nine rural local authorities.
In addition, a report on broadband access showed that rural Wales had some of the slowest internet speeds in the UK.
However, whilst politicians struggle to deal with these challenges within rural communities, it is easy to forget that for many businesses, these issues have been compounded by the fact that since April 2007, they have been faced with the prospect of paying hundreds of pounds more in business rates thanks to the abolition of the rural rate relief scheme for small businesses.
Not surprisingly, this problem was appreciated at the time of the last Assembly elections by the opposition parties, with both the Conservatives and Plaid Cymru developing proposals that would restore the rural rate relief scheme and enable businesses to keep more of their hard earned money.
Indeed, the area hardest hit under the change to the rural rate relief scheme was Gwynedd.
As Arfon’s Assembly Member, Alun Ffred Jones, pointed out at the time, four hundred Gwynedd businesses had lost £2 million due to the Assembly Government’s new business rate relief scheme and that “these changes show how out of touch New Labour is with more rural parts of Wales".
Fast forward to 2008 and twelve months of the One Wales Government - of which Mr Jones is a member - and what do we have? The same business rate relief scheme is still in place and those hundreds of Gwynedd businesses, in addition to thousands more across rural Wales, are still paying higher levels of rates than they did in 2006.
In England, rates are considerably lower for rural businesses. Therefore, not only are firms in rural Wales having to fork out more money to their local council, they are also at a disadvantage as compared to their competitors across the border who can spend their relief in coping with the credit crunch or even on improving their business.
Rather than the usual gimmicks and empty sound bites so beloved of politicians, why doesn’t the Labour-Plaid Assembly Government, as Alun Ffred himself rightly pointed out last year, “recognise the contribution that small businesses make to the Welsh economy by enhancing and extending the relief scheme for business rates”.
Given the current economic circumstances, those extra few hundred pounds could make the difference between success and failure within many small firms across the rural parts of Wales.
At the very least, it would help to cover the additional costs that are being incurred as a result of higher petrol prices and could help many through what may become a serious crisis for the Welsh economy during the next twelve months.
The study, written by the Commission for Rural Communities, argued that English rural areas had up to £347 billion a year of untapped potential, and that the barriers to business development remain affordable housing and transport.
The recommendations for improving this situation include an economic minister to oversee support of rural economies, a rural finance forum to tap into private and public money and a rural innovation initiative to encourage entrepreneurs and ensure access to resources such as broadband.
Of course, what applies to rural England also applies to Wales and I would argue that the problems highlighted in the report are even more acute here in our country.
Only last week, the Joseph Rowntree Foundation reported serious problems of affordability, sharp increases in homelessness and a limited housing supply within Wales’ nine rural local authorities.
In addition, a report on broadband access showed that rural Wales had some of the slowest internet speeds in the UK.
However, whilst politicians struggle to deal with these challenges within rural communities, it is easy to forget that for many businesses, these issues have been compounded by the fact that since April 2007, they have been faced with the prospect of paying hundreds of pounds more in business rates thanks to the abolition of the rural rate relief scheme for small businesses.
Not surprisingly, this problem was appreciated at the time of the last Assembly elections by the opposition parties, with both the Conservatives and Plaid Cymru developing proposals that would restore the rural rate relief scheme and enable businesses to keep more of their hard earned money.
Indeed, the area hardest hit under the change to the rural rate relief scheme was Gwynedd.
As Arfon’s Assembly Member, Alun Ffred Jones, pointed out at the time, four hundred Gwynedd businesses had lost £2 million due to the Assembly Government’s new business rate relief scheme and that “these changes show how out of touch New Labour is with more rural parts of Wales".
Fast forward to 2008 and twelve months of the One Wales Government - of which Mr Jones is a member - and what do we have? The same business rate relief scheme is still in place and those hundreds of Gwynedd businesses, in addition to thousands more across rural Wales, are still paying higher levels of rates than they did in 2006.
In England, rates are considerably lower for rural businesses. Therefore, not only are firms in rural Wales having to fork out more money to their local council, they are also at a disadvantage as compared to their competitors across the border who can spend their relief in coping with the credit crunch or even on improving their business.
Rather than the usual gimmicks and empty sound bites so beloved of politicians, why doesn’t the Labour-Plaid Assembly Government, as Alun Ffred himself rightly pointed out last year, “recognise the contribution that small businesses make to the Welsh economy by enhancing and extending the relief scheme for business rates”.
Given the current economic circumstances, those extra few hundred pounds could make the difference between success and failure within many small firms across the rural parts of Wales.
At the very least, it would help to cover the additional costs that are being incurred as a result of higher petrol prices and could help many through what may become a serious crisis for the Welsh economy during the next twelve months.
Comments
Won't many small businesses in rural areas be eligible for the new rate relief scheme? Surely it is better that so many more small businesses across Wales - rural and urban - now benefit from this support?
The doubling of business rates in Sir Gar as a consequence of the loss of rural rate relief has been a significant factor in our decision to re-organise and move our small retail business (trading 15 years). There has never been significant support for retail in Wales and yet retail contributes more to the GDP of Wales than farming for which sector the WAG bends over backward (interpret that as you will). Many small retail shops in Welsh towns have been reduced to charity shops, pound shops or run as tax write offs for another associated business.
In May, last year I went to the S of France to research a possible expansion of our shop. Before I went, I had heard that it was going to be a nightmare of bureaucracy, red tape and tax. Well, I was pleasantly surprised to learn that the setting up of 'micro-enterprises' in France is relatively easy and positively encouraged. When I told French people how much we were paying already in overheads, business rates, tax, utilities etc etc, they thought I was mis-speaking! Until I showed them the accounts. Well the bottom line is that it is easier (and more profitable) to do business in France than it is in Wales- something I never thought would be possible. Of course, there are severe issues and problems with the French economy and government but, in my view, this is largely compensated for in other ways.
I am proud of my Welsh ancestry and love Wales but my children are coming here for holidays only , not to make their way/careers in the World.
As I estimated last year, for around £8-£10 million per annum, we could have ensured that all businesses in Wales got the same releif as rural businesses previously did.
That may sound a lot but look how much is wasted on 'economic development' and 'business support' every year and on pet projects.
At least the rate relief would be recirculated and spent to improve the business, therefore benefitting the wider local economy.
The worst thing of all though is that English businesses are getting a better deal. As a pro-devolutionist, that really upsets me, especially as Plaid made a specific promise to ensure that this would not happen.
Welshwalker - tempting though France is, I am going to stay here and try and get it into politicians' heads that the small business sector at a local level needs all the support it can get.
Just look at the small businesses being choked to death in the Valleys by rising costs,rents and rates.
Business is not understood by politicians, most business they see are big corporates or larger SMEs and they get wined and dined by these and so they think that applies to all business.
The truth is very different