Over on WalesHome, Jonathan Edwards, the new Plaid Cymru PPC for Carmarthen East and Dinefwr comes up with "some ideas for banking, economic and financial reform".One of these "progressive new ideas" is "business rates cuts in the UK’s most disadvantaged areas in order to stimulate growth of local businesses and attract inward investment".
Far from me to correct one of Plaid's rising stars, but he should be aware by now that business rates policy is devolved to the Welsh Assembly Government.
Therefore Plaid Cymru, as part of the coalition, have had two and a half years to cut business rates in Wales.
Yet, Plaid's own leader stated in the Chamber last year that "We are not persuaded currently that it (business rate relief) is the best use of the limited resources that we have. We still think that they are best used for things like ProAct and ReAct".
Of course, we have since seen that two thirds of ProAct has been focused on large firms and that swathes of Wales have received very little from this policy, including Ieuan Wyn Jones' own constituency of Anglesey.
In addition, Mr Edwards should be aware that there has been a concerted campaign by leading members of Plaid to try and discredit any cuts in business rates as unaffordable. This is despite the announcement by Dafydd Wigley back in 2007 which stated that:
"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."
I couldn't agree more, which is why the Welsh Conservatives aims to do what Plaid has refused to do, and introduce a business rate reduction scheme that will benefit up to 90,000 firms in Wales at the next Assembly elections., ensuring that any businesses with a rateable value of below £10,000 will not pay any rates at all.
I am glad that at least one member of Plaid Cymru supports such a proposal.
Perhaps he can tell his Assembly colleagues to do the same.
Comments
SMEs are punished (by business rates, red tape and various other increasing tax burdens) for employing people. Govt initiatives to help firms seem elusive to most of us. In my case it's been a complete waste of time.
It's amazing that anyone bothers to start up a business in Wales.
How can we ever hope to shake off this dependency economy? By taking radical action to encourage entrepreneurship.
Cameron's new slogan is right. We can't go on like this.
Its time that AM.s MP.s and their prospectives talked to each other. You have a pop at this new Plaid guy, may be you could have quiet word in Nick Bourne's ear he is quoting slavery and suffrage for heavens sake.
I don't think so. How can one of their next MPs call for a reduction in business rates when his own party in power at cardiff Bay has refused to do so?
This is a major gaffe in terms of policy by Plaid and shows that there is little coherence when it comes to economic policies, especially as those developed for the last assembly elections have been dumped by the party.
But not enough people did vote for us, and we formed the current Welsh Government with Labour on the basis of One Wales agreement we hammered out with them, which meant having to make compromises. Business rates was one of them. When IWJ used "we" in the speech you quoted, he was speaking as a minister of the One Wales Government. That is the different you fail to appreciate ... especially in the light of your answer to VM.
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Of course, if Plaid had instead been able to form the Rainbow coalition, greater cuts in business rates might well have happened, since it seems that both Plaid and the Tories are in substantial agreement on the need for them ... but this would have been at the expense of other things.
Like most things in politics, it is a matter of relative priorities. The One Wales Government does fund the Small Business Rates Relief Scheme, which helps about 37,000 small businesses. So it's not as if nothing is being done in this area ... just that less is being done than Plaid would have liked.
How naive of me not to realise that it is perfectly acceptable for Plaid Cymru, for the sake of political expediency, to abandon their key economic policy and one of their seven key manifesto commitments and just continue with previous Labour policies on the economy.
What is distasteful to many is the way that members of Plaid Cymru who were so quick to criticise the Small Business Rates Relief Scheme as a poor substitute for the rural rate relief scheme during the run-up to the 2007 assembly election are now lining up to defend the current status quo and make excuses for Labour's policies rather than fighting the case for better rate relief for Welsh businesses.
As a Welsh nationalist, aren’t you embarrassed that England and Scotland provide better support for their businesses than we do here in Wales, even though we have the power to introduce a similar if not better rates relief system?
You have fallen into the old Labour trap of equating business rate cuts "at the expense of other things". However, as Dafydd Wigley rightly points out, all it takes is a re-prioritisation of economic policies to enable a better rates relief package to be supported, and his arguments are as valid now as they were back in 2007, even more so given the recession we are currently experiencing.
Instead, Plaid Cymru have decided to continue with Labour’s failed economic policies and support a bloated over-bureaucratic business support system that is failing to deliver for Wales.
Perhaps you can explain to me why not one member of Plaid Cymru in the Assembly has come out to enlighten us poor voters as to why Dafydd Wigley was wrong?
Don’t you think it is embarrassing that it is a Welsh Conservative who supports your Honorary President’s stance on the economy and that there is total silence from your party on this matter?
More importantly, could you point out where the current One-Wales economic policy differs substantially from the ones pursued by Andrew Davies under Labour since 2003?
To save you the trouble, the answer is that not one new major policy has emerged from the economic development ministry under Plaid Cymru’s leadership which has made any real difference to the Welsh economy during the last two and a half years.
So technically speaking, the backward performance from Plaid's economic policies could be described as doing less than nothing.
I might also say that your policy (if it finds its way into the next Tory manifesto) of increasing the number of business that benefit from rates cuts to "up to 90,000" might in turn be subject to compromise if your party fails to get an absolute majority in 2011. Politics in Wales is different to politics in Westminster. We don't have a system by which a party with only a minority of votes gets an artificially high majority of seats.
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Now of course Plaid's policy of cutting business rates and corporation tax is something that is likely to bring more financial benefit to Wales than it costs. I think I might be on safe ground to say that you, as a Tory, would agree with us fully on that. But the reality is that—as the current fiscal arrangements between Westminster, the Assembly and local authorities stand—Wales would not actually reap much direct benefit from such a policy. If more people are in work as a result of a thriving Welsh economy, all the corresponding reduction in benefits payments (and any additional tax take) gets kept entirely by Westminster. So in the CURRENT situation—where the Assembly gets a block grant which it is responsible for spending, but is not responsible for how that money is raised—any money that is used for one thing MUST be at the expense of spending that money on something else.
Until we get responsibility for setting levels of various taxes as well as spending them Wales will remain in this situation. One of the things I hope for from a Tory government in Westminster is that devolution will move forward to give both Wales and Scotland greater fiscal autonomy than Labour has been willing to give us.
The truth is Ieuan did towards the end of 2009 announce a change of direction in Welsh economic policy away from previous Labour policy of luring companies here with grants, towards creating more indigenous businesses and spending money more wisely.
A good criticism might be 'why did it take so long?' It's too late now for Ieuan to do anything significantly different, but I think he has done well to get the business community working with the unions and the Welsh Government around the economic summits. Also, it took Andrew Davies long enough to build up the department for his goals, it might take Ieuan a similar number of years (longer than one term) to turn it around.
Of course, if Plaid once again get into Government in 2011, and retain a degree of control over the economic development portfolio, Ieuan's "change of direction" will really start to come good, and we will have a self-determined Welsh economic policy for the first time in our nation's history. We will then see the real results happening.
Finally, business rates do not fall under Ieuan's portfolio but are the responsibility of Labour's Local Govt Minister Carl Sargeant, and previously Brian Gibbons.
You mean to tell me that Cherly Gillian discusses stuff with Bourne
She is never ever on the same message as him.
Mind after seeing the rubbish he spouts maybe thats not a bit thing.
Your party abandoned it when you signed the OneWales agreement in the summer of 2007.
To say that you now have one for the Westminster elections when the power is clearly within the remit of the Assembly is bizarre in the extreme.
By all means ask for powers over corporation tax but you know full well that business rates are a devolved matter for the Welsh Assembly Government. If Plaid Cymru is happy for Welsh businesses to pay higher rates than their equivalents in England or Scotland, then that is a very strange form of economic nationalism.
However, the most disturbing aspect of Plaid Assembly Members’ reaction is that they have not adopted your line in the comment i.e. we couldn’t do this because of compromise agreement with Labour. At least that could have been understood, especially if they had promised a review of business rates as part of an overall economic strategy package.
Instead, like the converted, they have gone hell for leather to defend the current business rates scenario despite campaigning for further exemptions for small businesses during the Assembly campaign.
Silence, in this instance, would have been better than hypocrisy.
Your point about “any money that is used for one thing MUST be at the expense of spending that money on something else” is, for wont of a better word, disingenuous.
Plaid’s policy was drawn up in 2007 under the current constitutional settlement and, as Dafydd Wigley pointed out, you can cut some of the bureuacrcay within the businesss support system and transfer this directly for the benefit of small firms through a business rate reductions.
He believes in it, I believe in it, why can’t Plaid Cymru believe in it?
As I said in the last comment, perhaps you can enlighten us as to why Dafydd Wigley was wrong to ask for the economic development to be used to support business rate relief for the majority of small firms in Wales?
Surely Plaid don’t believe, as Labour do, in a corporatist approach to economic development?
To be fair, this is not only a question of the Minister but the civil servants who, according to everyone I know in Cardiff Bay, are running rings around him.
They are happy to keep the status quo developed under Labour which, given that most of them were appointed by Andrew Davies himself, is no surprise. I would have loved to see their faces if the Rainbow Coalition had come into force as there would have been real change to the welsh economy. However, I can wait another year and half if you can.
However, if you really believe that anything will change under the current One-wales Government, then you are living in a completely different world to everyone else I talk to in the Welsh business community.
There is no economic strategy for Wales, all the economic statistics show a growing gap with the rest of the UK, the bureaucracy within WAG is stifling any enterprise or innovation, and money is just being thrown at any project which makes the right noises, irrespective of whether it will bring benefit to the economy.
But it could be so different. As Jeff Jones says today in the Western mail in one of the best articles I have read by a Labour politician,
“Look at the areas in Europe and the rest of the world where things do happen. Dynamic civil servants and dynamic politicians with a vision and popular mandate is often the key to real progress”.
Unfortunately, apart from one or two exceptions, we have neither of these within government in Wales which is why we are in the mess we are in.
As for your other points, Ieuan didn’t come up with the idea of the economic summits; WAG is still giving out grants to large businesses (£1.7 million to a Finnish company yesterday); and Plaid, if they thought that business rates were that important, could have made a deal under the One-Wales agreement to cut business rates irrespective of whose department they reside.
As for anon 5:43, get a life (and a spellchecker)
We will fight the next election on our policies, and if more people vote for us next time round we will be in a better position to put these policies into action in the Fourth Assembly.
As usual, you descend into condescension when you cannot win an argument, a trait that unfortunately dilutes much of the arguments on your blog.
You again fail to explain why this key policy - one of your seven key pledges to the electorate - was abandoned and why many of Plaid Cymru now believe it is wrong to abolish business rates and defend this policy in the media.
You also fail to answer why Dafydd Wigley is wrong to suggest that business rates could be cut through cutting the business support budget.
As i said, silence would have been better than hypocrisy and if you think Plaid Cymru can fight the next election on abolishing business rates after what some of your current members have said, then you should consider changing your blog to "dim syniad".
anon - yes and 40 per cent will see their bills go up to pay for the cuts. The point is that if Plaid Cymru had kept their promises, 50,000 businesses wouldn't be paying any rates at all.
However I would note that you started by claiming that Plaid had mixed messages on business rates, but by yesterday evening all trace of that has gone, to be replaced with the unequivocal assertion that "Plaid don't have a policy of cutting business rates."
Today, I am even more surprised to find you talking about "abolishing" business rates. I don't think anyone has proposed that within the current fiscal powers available to us in Wales, as it certainly couldn't be done unless an alternative way of taxing business was found. However in principle I wouldn't object to that idea, because I think it is generally fairer to tax businesses on the profits they make rather than the premises they occupy (in the same way as I think local income tax would be fairer than the Council Tax) ... but to make that change would require us to have a far greater degree of fiscal autonomy than we have at present.
Finally you claim that "if Plaid Cymru had kept their promises, 50,000 businesses wouldn't be paying any rates at all." I don't know where you got that from, since our manifesto commitment was to "cut business rates by up to half" which, as I've said several times, we would have done if we had won enough seats to enable us to do so.
"7 for ‘07 – 50,000 businesses to be free of business rates
13 March 2007
Plaid today (Tuesday 13th of March) launched proposals to take 50,000 Welsh businesses out of the business rates net. The announcement is the last of Plaid’s 7 for ‘07 policies to transform Wales. Plaid Leader, Ieuan Wyn Jones outlined proposals, targeted at the West Wales and the valleys region, that would see an immediate increase in the number of businesses entitled to 50% and 25% rate relief and a total of over 50,000 businesses completely leaving the business rates net by 2011. Combined with a more targeted usage of European convergence funding these cuts in business rates will transform the economy of West Wales and the Valleys.
Plaid Leader Ieuan Wyn Jones commented:
“These cuts in business rates would see 50,000 small businesses taken out of the business rates net. This is a real improvement which would benefit small businesses without an increase in bureaucracy. Cutting these rates will help indigenous companies and will make Wales more attractive to business. Combined with a fairer use of the Government’s procurement power and better targeting of convergence funding this policy will kick start the economy of Wales.”
QED
How does that compare with your "businesses with a rateable value of below £10,000 will not pay any rates at all"? Do you have figures for how many businesses have premises with a rateable value of less than £10,000?
It may well be that we're not too far apart on this.
Do you have a figure for the latter, i.e. those below the £10,000 threshold?