At a time when the small firm sector in Wales needed support, the Assembly Government has come up short yet again.
Conveniently waiting until after the council elections, the Local Government Minister announced plans to make only minor changes to the business rate relief scheme in Wales, changes that would make no real difference to the majority of small firms struggling in a difficult business environment.
To cut a long story, this will now mean that all businesses in Wales with a rateable value of under £2000 will receive a 50 per cent discount off their rates, with a further discount of 25 per cent for those with a rateable value of between £2000 and £5,999.
However, for thousands of businesses, this still represents a massive tax rise. This is because under the rural rate relief scheme abolished by Labour last year, those firms with a rateable value of up to £6000 previously qualified for a 50 per cent discount in many parts of Wales.
Therefore, many businesses will still be paying far higher rates of business tax than they did two years ago. Whilst politicians in Wales talk about small firms being the backbone of the economy, they are instead the ‘poor cousins’ as compared to firms in the other parts of the UK.
In England, businesses get an automatic 50 per cent relief if they have a rateable value of below £5,000, with a sliding scale of further relief up to a rateable value of £10,000. In Scotland, businesses with a rateable value of £8,000 or less are to pay no business rates whatsoever, with additional discounts for those businesses with a rateable value of between £8,000 and £15,000
Simply put, Welsh businesses are short-changed relative to their Scottish and English counterparts at a time when our entrepreneurs need as much support as they can get.
The lack of imagination by the Assembly in supporting small businesses is absolutely staggering.
Instead of this pittance, why didn’t they ensure that Welsh firms get the same rate relief as England?
Why didn’t they double the limits of rate relief for businesses within our poorer areas qualifying for European funding?
Why didn’t they abolish business rates for all new firms less than three years old to encourage greater entrepreneurship?
I wonder what Plaid Cymru members will think of this announcement. In their 2007 Assembly manifesto, their key economic policy promised that “thousands of small businesses in Wales would be taken completely out of the business rate net” but, yet again, their good intentions have been massively diluted by their Labour partners in Cardiff Bay. Why has this broken promise not been picked up by the Welsh press?
The Assembly Government does not need additional powers to adjust business rates. It is a mechanism that is relatively simple to implement and can positively affect thousands of firms without any undue bureaucracy.
Given this, I hope that all small businesses will write to their local Assembly Member to ask why they are treated as second class citizens as compared to Scottish or English firms. I would also expect organisations such as the Federation for Small Businesses to lobby Ministers and object vehemently at this measly change in business rate exemptions.
At a time when the credit crunch is hitting many small firms across Wales, the Assembly Government could have at least ensured parity with England over the rate relief scheme and assisted small businesses at a time when they need it the most.
They chose not to, and yet again demonstrated a complete lack of understanding of the real needs of small firms across Wales.
Conveniently waiting until after the council elections, the Local Government Minister announced plans to make only minor changes to the business rate relief scheme in Wales, changes that would make no real difference to the majority of small firms struggling in a difficult business environment.
To cut a long story, this will now mean that all businesses in Wales with a rateable value of under £2000 will receive a 50 per cent discount off their rates, with a further discount of 25 per cent for those with a rateable value of between £2000 and £5,999.
However, for thousands of businesses, this still represents a massive tax rise. This is because under the rural rate relief scheme abolished by Labour last year, those firms with a rateable value of up to £6000 previously qualified for a 50 per cent discount in many parts of Wales.
Therefore, many businesses will still be paying far higher rates of business tax than they did two years ago. Whilst politicians in Wales talk about small firms being the backbone of the economy, they are instead the ‘poor cousins’ as compared to firms in the other parts of the UK.
In England, businesses get an automatic 50 per cent relief if they have a rateable value of below £5,000, with a sliding scale of further relief up to a rateable value of £10,000. In Scotland, businesses with a rateable value of £8,000 or less are to pay no business rates whatsoever, with additional discounts for those businesses with a rateable value of between £8,000 and £15,000
Simply put, Welsh businesses are short-changed relative to their Scottish and English counterparts at a time when our entrepreneurs need as much support as they can get.
The lack of imagination by the Assembly in supporting small businesses is absolutely staggering.
Instead of this pittance, why didn’t they ensure that Welsh firms get the same rate relief as England?
Why didn’t they double the limits of rate relief for businesses within our poorer areas qualifying for European funding?
Why didn’t they abolish business rates for all new firms less than three years old to encourage greater entrepreneurship?
I wonder what Plaid Cymru members will think of this announcement. In their 2007 Assembly manifesto, their key economic policy promised that “thousands of small businesses in Wales would be taken completely out of the business rate net” but, yet again, their good intentions have been massively diluted by their Labour partners in Cardiff Bay. Why has this broken promise not been picked up by the Welsh press?
The Assembly Government does not need additional powers to adjust business rates. It is a mechanism that is relatively simple to implement and can positively affect thousands of firms without any undue bureaucracy.
Given this, I hope that all small businesses will write to their local Assembly Member to ask why they are treated as second class citizens as compared to Scottish or English firms. I would also expect organisations such as the Federation for Small Businesses to lobby Ministers and object vehemently at this measly change in business rate exemptions.
At a time when the credit crunch is hitting many small firms across Wales, the Assembly Government could have at least ensured parity with England over the rate relief scheme and assisted small businesses at a time when they need it the most.
They chose not to, and yet again demonstrated a complete lack of understanding of the real needs of small firms across Wales.
Comments
I am absolutely staggered that the Welsh press has not picked up on an issue that will affect thousands of small businesses and therefore hundreds of local communities across Wales.
Sion Barry is only interestde in big business as is the WM.They have a target audience that does not include small business,ask them.
So who does pick up the baton.
Small Business have a real raw deal here in Wales.No one is interested at strategic or government level.
I have a small business and I am so disppointed in the total lack of support I have had
Ive been to see my AM and he is taking it up