Speaking in the House of Commons this week, Vale of Clwyd MP Dr James Davies highlighted the pressures facing small businesses in North Wales as a result of the Welsh Government reducing retail, hospitality and leisure business rates relief.
The Labour Welsh Government made the decision to cut business rates relief in their 2024-25 draft budget from 75% to 40% for the retail, leisure and hospitality sector.
In England, business rates relief will remain at 75% for the next financial year and the Welsh Government are receiving the consequential funding to continue with the relief here in Wales, but have made the political decision not to.
James has been contacted by a number of businesses in the Vale of Clwyd who fear the detrimental impact these cuts will have on them.
In Parliament yesterday, James raised the matter with Exchequer Secretary to the Treasury, Gareth Davies MP.
He said:
“The Welsh Government are increasing the burden on small businesses by reducing retail, hospitality and leisure business rates relief from 75% to just 40%, despite the UK Government rightly extending that relief in England in the Budget.
“That means that businesses in my constituency, such as the Little Cheesemonger, Now to Bed, Presents with a Difference and Tu Mundo, are all facing unsustainable business rates bills. One business has to find an extra £35,000 a year for business rates alone.
“What advice does the Minister have for small businesses in north Wales facing these onerous bills?”
Responding, the Exchequer Secretary to the Treasury said:
“My hon. Friend is right that at the autumn statement, this Government extended the retail, hospitality and leisure relief in England - a tax cut worth £2.5 billion for small businesses. The Barnett formula applies to allow the Welsh Labour Government to offer similar relief if they want to. It is disappointing, if not surprising, that when given the opportunity, Labour decides not to cut taxes for working people.”
Speaking afterwards, James, who recently wrote to the Welsh Finance Minister on behalf of a constituent impacted by the cut to rates relief, said:
“The Welsh Finance Minister has attempted to defend the Welsh Government’s decision not to continue business rates support in line with England, stating it was a ‘tough choice’ but has meant the NHS has more money.
"Yet, the truth of the matter is, they have previously cut the NHS budget, unlike England, and have created such a mess in the NHS that they are now punishing wealth-generating businesses to compensate for that. We know that this could be counter-productive, as if businesses fail to thrive, there will be a reduced tax-take, meaning less funding for public services.
“Small businesses have faced a difficult few years due to the pandemic and the Welsh Government should be following the UK Government’s lead in supporting them and helping them to grow, not burdening them further.”
See ITV coverage on this issue: https://www.itv.com/news/wales/2024-01-17/why-should-we-pay-more-becaus…
