Business Rates

1. Questions to the Minister for Finance and Local Government – in the Senedd at on 13 October 2021.

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Photo of Altaf Hussain Altaf Hussain Conservative


6. Will the Minister set out the Welsh Government’s business rates policy for this parliamentary term? OQ56991

Photo of Rebecca Evans Rebecca Evans Labour 2:04, 13 October 2021

We are developing an ambitious programme of local tax reforms that support a stronger economy, stable communities and vibrant public services. Within this, we are considering how to improve our non-domestic rates system while sustaining vital revenue for local services, which deliver significant benefits for everyone.

Photo of Altaf Hussain Altaf Hussain Conservative 2:05, 13 October 2021

Thank you, Minister. Minister, your party leader, Keir Starmer, has said that the Labour Party favours the abolishing of business rates and that they should be replaced. We all know that many businesses in Wales have struggled and, with our towns needing an economic boost, it is time that our approach to business support is addressed. Was Keir Starmer talking on your behalf too, and, if he was not, what is the view of this Welsh Labour Government on the future of business rates?

Photo of Rebecca Evans Rebecca Evans Labour

Well, it's very exciting to see how interested the Conservative benches are in the UK Government's approach to non-domestic rates. I decide non-domestic rates here in Wales, and we do so based on the situation here in Wales, which is somewhat different in terms of our economy, and we're very pleased to be in a position to do so here in Wales.

What I will say is that we're looking at an ambitious programme of reform for local taxation, considering various options for the future. I hope to say more, ideally this side of Christmas, specifically in terms of local taxation for council tax, but we're looking to see what more we can do to improve non-domestic rates. Again, there's a big opportunity for the UK Government on 27 October, through the spending review, to set out its plans for non-domestic rates in England for the next financial year, and of course it has a big impact on what we're able to do here.

You'll be aware of our scheme that we have in Wales, where retail, leisure and hospitality businesses have a full year of rate relief, which is much more generous than that which is available across the border, but to do that costs £380 million, so these are not small interventions that we're making, and they do—. If the UK Government manages to put in place a scheme that is able to support businesses in that significant way, obviously we would be looking to do something similar here in Wales. And UK Government is also undertaking the fundamental review of business rates in England and we're looking very closely at that to understand what it means for us here in Wales. For example, will they take action on taxing digital sales and so on? There are lots of questions that remain unanswered, but we look forward to that review reporting.

Photo of Jane Dodds Jane Dodds Liberal Democrat 2:07, 13 October 2021

Good afternoon, Minister. May I ask you again about business rates? Because, like many colleagues in this Chamber, we're asked about business rates by small family businesses, which, at this particular time, are under a great deal of pressure. I'm just interested to know how the Welsh Government communicates to those businesses, particularly small family businesses, what reforms are taking place and indeed the control that the Welsh Government has or has not in relation to their particular situation. And may I ask as well what investment relief you are looking at in order to support those small and medium-sized businesses to invest in order to boost both productivity and decarbonisation efforts? Thank you. Diolch yn fawr iawn.

Photo of Rebecca Evans Rebecca Evans Labour 2:08, 13 October 2021

Thank you for raising that issue this afternoon. There are a number of ways in which we communicate directly with businesses. One is through Business Wales, which has an excellent database of businesses here in Wales, so we're able to get information to them very rapidly and that was extremely useful to us during the pandemic. And, of course, all businesses that are subject to non-domestic rates will be on the local register of their councils, which should, again, be a useful way to share information. And again, that was extremely useful to us during the course of the pandemic when we were able to get grants to businesses very, very rapidly indeed.

In terms of the future of business rates, I think that much depends on the outcome of the fundamental review and what that will mean for us here in Wales. Business rates here provide around £1 billion of our Welsh budget, so this is a significant amount of money, so we need to be thinking, in any kind of review of business rates, what the implications would be for public spending. I did have an excellent meeting yesterday with the Welsh Retail Consortium and they were able to talk quite passionately about the potential ways in which business rates could change to maybe further recognise investment in decarbonisation, for example. There were lots of ideas that they able to share with us, which were all very interesting. I don't have a road map for any changes today, but I'm keen to hear ideas as to what might improve the situation in the future.