Last week, I was sent a Plaid Cymru leaflet from an anonymous source in North Wales which highlighted the ‘achievements’ of the party in helping to “persuade the Welsh Government to limit the damage caused by the recent business rate revaluation”.Does this mean part of the Welsh Assembly Government (WAG) has finally admitted that its policies have damaged local economies throughout Wales?
If so, it is about time, given that, for the last two and a half years, Plaid Cymru has not come up with one meaningful policy to help small business and has slavishly followed the Labour Party’s failed approach to the economy of Wales.
Indeed, the abject surrender to the policies pursued under labour during 2003-2007 has meant that the Welsh economy has continued its spiral of decline.
Nowhere is this more apparent than in the policy over business rates.
The truth over business rates is that simply has not been any meaningful poliyc development. Instead of examining the impact of business rates on Welsh firms during a recession, WAG has merely copied the UK Government's position in England. Consequently, there has actually been no additional support from WAG for any reductions, which are simply a result of a UK government requirement to ensure that the re-evaluation exercise was cost neutral.
This means that the decrease in business rates for 64,000 businesses across Wales is being paid by the 40,000 firms which will be getting an increase in their business rates. Therefore, 40 per cent of businesses across Wales will still be paying more in business rates in 2010 than they did in the previous year.
It could have been so different.
The leadership of Plaid Cymru could have, if they had the courage of their convictions, honoured their manifesto commitment of ensuring that 50,000 businesses in Wales would be paying no business rates at all. However, they did not and the ‘Party of Wales’ continues to be silent about this enormous u-turn in policy, despite the fact that this idea was the brainchild of its former leader, Dafydd Wigley.
As he said back in 2007,
"My feeling is that a lower business rate can be a more effective tool than corporation tax for our small businesses....People may well ask how on earth can we pay for this. All I would do is to point to the increases taking place in the economic development budget in Wales since 1999. In fact expenditure has increased from £250m to over £800m per annum - and I really do ask what do we have to show for it? A significant reduction in the business rate might cost between £100m and £200m, depending on how it was applied, but it certainly can be afforded within that budget, and it would be better for that money to be re-circulating within the business sector, enabling it to take on more people, to set up new projects, and to have a new confidence and incentive for its work, than being gobbled up in the bottomless pit of bureaucracy, where so much of it ends up at present."
Plaid's failure to do what Dafydd Wigley proposed is highlighted best by comparing the situation in Wales to that of Scotland, where Plaid’s sister party has abolished business rates for all properties with a rateable value of £8,000 or less - a scheme that has benefited 120,000 Scottish businesses.
Whilst the Conservatives in Wales are attacked for proposing a reduction in business rates, have we heard anyone from Plaid criticise the SNP for a similar policy?
Of course not. Instead of doing something positive, Plaid is happy to fall back on bland claims that “The Welsh government, of which Plaid Cymru is a part, has won praise from economic commentators, the CBI, the trade unions and representatives of small businesses for its response to the recession".
Frankly, WAG’s policies could be praised by every Nobel Prize winning economist for all the good that they have done to the Welsh economy, as recent economic data has shown.
For example, statistics released by the government last week showed that Wales remains the poorest UK region with an annual growth rate that is lower than at any time since the 1980s. More shamefully, Conwy and Denbighshire have now joined the list of the five poorest areas in the UK.
Unemployment in Wales continues to be blight the lives of workers and their families struggling to survive recession.
In the last year alone, 600 Welsh jobs a week have been lost with almost half of all UK jobs losses in the last quarter coming from Wales. With two thirds of the funding for WAG programmes such as Pro-Act benefiting large businesses, those in power seem to have forgotten their own mantra that small firms are the backbone of the Welsh economy.
Certainly, if we are to compete successfully with other parts of the UK, we can start by making sure that small business in Wales gets the same type of business rate support as regions such as Scotland. After all, if it is good enough for the Scots – whose economy has grown at a far higher rate than Wales - then it should be good enough for us.
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