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Pathetic

Just when I dared to hope for something different from the Welsh Assembly Government, they have, predictably, copied the Chancellor's announcement on business rates.

Read the statement below from Brian Gibbons and weep.

"I am pleased to announce that the Welsh Assembly Government intends to implement measures to help Welsh businesses with their rates bills. The action I propose is in line with that announced by the Chancellor of the Exchequer in respect of England, yesterday.

Under the current arrangements non-domestic rate bills for 2009-10 are set to increase by 5%. This is in accordance with the statutory provision in the Local Government Finance Act 1988 that the business rates “multiplier” – which determines the level of annual increase - should not rise by more than the retail price index (RPI) for the September preceding the rating year.

Since last September there has been a very rapid reduction in the RPI and I propose to bring forward regulations under the 1988 Act that will allow Welsh businesses, if they wish, to pay an annual increase of only 2% in 2009-10 with the remaining 3% spread over the following 2 years, 2010-11 and 2011-12. We will be discussing the details of the revised arrangements with the Treasury; the Welsh Local Government Association and Welsh Business. I propose to have the regulations needed to implement these changes in place in July.

This is a very welcome development. The Assembly Government made representations to the U.K. Government over the increase in the multiplier late last year, in the context of the discussions we have been having with Welsh business and other partners over combating the effect of the recession at our Economic Summit meetings.

As I have made clear on numerous occasions non-domestic rating functions are not fully devolved and the Assembly Government would have had to bear the cost of any unilateral action it took to reduce the multiplier increase. Every 1% reduction in the level of increase would represent a cost of around £8m in forgone revenue to the U.K. Government Exchequer. Yesterday’s announcement by the Chancellor in respect of England means that this will no longer be the case. The U.K. Government will meet the cost of the deferment in non-domestic rate income arising from these changes.

The changes I am proposing will reduce the rates bill in 2009-10 for potentially around 100,000 businesses in Wales by some £24m overall. They come in addition to the £20m in rate relief we are already giving to small businesses in Wales and the temporary increases in rates relief on empty properties in 2009-10 that I have announced and which come into effect from today.

The additional costs to local government resulting from the changes will be met centrally. We will be discussing the issue of costs with Local Government as soon as possible.

The amount of overall support for local authorities’ unhypothecated spending that the Assembly Government provides through Aggregate External Finance (which comprises revenue support grant and redistributable non-domestic rates) approved under the 2009-10 Local Government Revenue Settlement will remain unchanged.

The proposals will not require local authorities to re-bill businesses in their area as a result of these changes. Once the necessary regulations are in place billing authorities will write to all businesses in their area offering them the option to defer payments. Until then businesses will need to keep paying their business rates in the normal way. My officials will be writing out to local authorities within the next few days providing them with more details of these changes".


So the Assembly Government is now claiming credit for slavishly following the Chancellor's reductions which, in themselves, were forced upon him by intense lobbying from business organisations.

Yet again, this decision demonstrates a fundamental weakness at the heart of devolution in Wales and, as a pro-devolutionist, it breaks my heart.

The Cabinet, especially Plaid Cymru Ministers, should ask themselves what is the point of having a devolved government if all it does is copy everything that English ministers announce to the last letter.

More importantly, why are they spending a fortune on a commission to examine a referendum on further devolved powers when it refuses to take advantage of those powers that we already have?

Comments

Anonymous said…
who cares?
Actually I do and so do tens of thousands of other businesses which have been let down by this Government. I still find it difficutl to fathom how, on the one hand, the Assembly Government can find £48 million for the ProAct scheme and yet cannot find anything similar to support the vast majority of small firms in Wales.
Anonymous said…
they dropped a major one in business support in Mid Wales haven't they tut tut
Anonymous said…
maybe this would have happened before darling if they had the powers.

Also why are you having a go at the proact scheme. Most of the companies i have spoken to think it has been fantastic?
They do have the powers and have had so since 1999. That is the whole point. They can adjust business rates as they wish - they just choose not to do so.

I am not having a go at the ProAct scheme.

Far from it, especially as I suggested such a scheme in my column in the Western Mail on Nov 1st, well before it was adopted by the Assembly. A copy of this article was posted on this blog on Nov 2nd.

However, it will only benefit a small number of companies as the Assembly themselves have admitted and, inevitably, this will go to the large manufacturing firms, predominantly in the automotive sector.

Business rates are the only fiscal tool available to the Assembly to help business. If they want to do the same as England, then waht is the poitn of having those powers.

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