Business rates

As readers of this blog will know by now, I am a passionate supporter of reducing business rates for small firms in Wales.

In devolution terms, it is the only real financial instrument available to the Welsh Assembly Government and whilst it does not have power to reduce corporation tax, it does have responsibility for business rates which affects every single business in our economy.

Therefore, at a time when analysts predict that Wales is one of the UK regions that will take longest to come out recession, why do we have the grotesque spectacle of ministers within our Assembly Government announcing that business rates will be raised by a minimum of five per cent in April?

Why does the Assembly Government, which has the power to do things differently, meekly follow the line of the UK Government at a time when every pound saved is critical to the survival of businesses throughout this nation?

This would have been expected from those Labour politicians who penalised thousands of small firms across North Wales when they abolished the rural rate relief scheme before the last Assembly election.

However, there can be no excuse for their coalition partners Plaid Cymru who made the reduction of business rates the central plank of the radical but realistic economic manifesto written by Dafydd Wigley.

Sadly, that manifesto commitment, like the promises to establish a Welsh language newspaper and support student top up fees, has been sacrificed on the altar of political power to the extent that there is no visible difference between the policies of this coalition government and the last Labour administration.

Even if they cannot fulfil their election promise to radically reduce business rates across Wales, then nationalist ministers could at least lobby their cabinet colleagues to stop the 5 per cent increase which will disproportionately affect small businesses in every community across the land.

However, given their track record to date, it seems unlikely that their political partners will listen.

There is not a week that goes by when the Assembly Government claims that it has listened to businesses at the various economic summits held up and down the land over the last five months. Yet how many of the small businesses at the heart of every community in North Wales, such as the local greengrocer, butcher, shopkeeper, baker or pub owner, will actually benefit from any of the grand schemes announced?

The Assembly Government would argue that it introduced a £7 million rate relief scheme last autumn to help small firms in Wales. Yet, compare this sum to the £48 million which will be handed to large manufacturing companies across Wales under the ProAct scheme.

Worse still, think of the £290 million that is spent on the bloated bureaucracy that makes up our so-called business support sector in Wales, a sector that has been reorganised so often and given so many different names that many businesses are clueless about what can be done to help them.

Perhaps, as a prominent businessperson said to me last week, the time has come to give a large part of the hundreds of millions spent on business support directly to businesses through cutting their rates. At least they could then choose how to spend their own money in developing their business.

Those of us who support devolution do so partly because it gives us the opportunity to have different policies to those across the border. Wales, with a larger proportion of smaller businesses than England, should focus its economic policies on directly supporting its small firm sector at a time when it needs it the most.

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