9. The Non-Domestic Rating (Multiplier) (Wales) Regulations 2024

– in the Senedd at 6:36 pm on 20 February 2024.

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Photo of Elin Jones Elin Jones Plaid Cymru 6:36, 20 February 2024

(Translated)

Item 9 is next, the Non-Domestic Rating (Multiplier) (Wales) Regulations 2024. The Minister to move the motion—Rebecca Evans.

(Translated)

Motion NDM8486 Lesley Griffiths

To propose that the Senedd, in accordance with Standing Order 27.5, approves that the draft The Non-Domestic Rating (Multiplier) (Wales) Regulations 2024 is made in accordance with the draft laid in the Table Office on 23 January 2024.

(Translated)

Motion moved.

Photo of Rebecca Evans Rebecca Evans Labour 6:36, 20 February 2024

I move the motion to approve the Non-Domestic Rating (Multiplier) (Wales) Regulations 2024. The regulations result in a non-domestic rating multiplier for 2024-25 of 0.562.

On 19 December I announced that we would limit the increase in the multiplier for 2024-25 at a recurring cost to the Welsh budget of £18 million—a move that benefits every ratepayer in Wales, except the almost 50 per cent who already pay no rates at all. The multiplier will increase by 5 per cent as opposed to the default increase of 6.7 per cent in line with the consumer price index inflation. This is the maximum level of support available using all of the consequential funding received from the UK Government's announcement in relation to the 2024-25 multiplier. Alongside the decision to limit the increase in the multiplier, we're providing a generous package of reliefs. Through these reliefs, almost half of all ratepayers, including thousands of small businesses, pay no rates at all. When partial support is included, ratepayers in more than 80 per cent of properties will benefit from relief in 2024-25. That equates to 104,000 properties across Wales, or, to put it another way, less than 20 per cent of properties will attract full rates.

In total we're providing £384 million in NDR support next year. Every ratepayer will benefit from this package. Our support strikes a balance between supporting businesses and other ratepayers in Wales, particularly given the pressures they've been facing, and the need to maintain a stable revenue stream for local services, upon which we all depend. This support is fully funded by the Welsh Government. I'm grateful to the Legislation, Justice and Constitution Committee for its consideration of the regulations and I ask Members to approve the regulations today.

Photo of Peter Fox Peter Fox Conservative 6:38, 20 February 2024

I'm glad the Welsh Government is finally introducing powers to implement a split multiplier through the local government finance Bill—something that we've called for for a long time. However, what remains concerning is the fact that all businesses here in Wales pay a higher rate than businesses in both England and Scotland and that's even with the 5 per cent increase, rather than the 6.7 per cent CPI figure. The proposed changes will see Welsh businesses facing the highest multiplier at 56.2. It's a shame that option 3, as described in the explanatory memorandum, to freeze the multiplier at last year's rate of 53.5p hadn't been chosen, recognising how difficult things are for our businesses following recent years. And to make matters worse, as we know, Welsh Government has pulled support from businesses in the hospitality, leisure and retail sectors here in Wales, ensuring that pubs and restaurants and shops will pay almost double the rate of business rates as their counterparts in England. So, in light of this, Llywydd, we cannot support these regulations that maintain such high business rates here in Wales.

Photo of Peredur Owen Griffiths Peredur Owen Griffiths Plaid Cymru 6:40, 20 February 2024

While we welcome the decision to cap the increase to the non-domestic rate multiplier in Wales below CPI inflation, this needs to be contextualised against the substantial cut in business relief from 75 per cent to 40 per cent as part of the upcoming budget. Having already been badly hit by the pandemic's economic fallout, the threat of widespread closures, especially in the retail and hospitality sector, now looms large. As we've been emphasising ever since the publication of the draft budget in December, we would urge the Welsh Government to do everything it can to fully support businesses during this period of acute financial hardship. This should include having sufficient Senedd and committee time for far-reaching decisions like this to be debated and scrutinised in full. While we have been discussing the general state of the budget over the past few weeks, it's a regrettable that this specific and highly significant aspect of the draft budget scrutiny has been squeezed because of time constraints.

I'd also be grateful if the Minister could elaborate on the rationale for setting the increase to the multiplier to 5 per cent. What leeway did the Government have in this respect, and was there any consideration of limiting the increase even further? Diolch.

Photo of Rebecca Evans Rebecca Evans Labour

I'm grateful to both colleagues for their contributions today, and I remember we had a similar contribution from the Conservatives in the debate on the multiplier last year. I just want to be really, really clear that if this motion isn't passed today, the multiplier will rise in line with CPI, and it will be 6.7 per cent, as opposed to 5 per cent. So, any vote other than supporting the motion today would actually require businesses to pay more in Wales. Again, we had a similar debate last year, so the choice for colleagues is to support a 5 per cent increase to the multiplier or a 6.7 per cent increase to the multiplier. Those are the only two possible outcomes from the vote that we're having today.

And then to answer that specific question in relation to the 5 per cent—5 per cent is the figure that you arrive at when you use every penny of the additional funding that came through as a consequence of the UK Government's decision in relation to the multiplier in England. So, we used every penny of that, and that resulted in the 5 per cent.

To reflect on some of the other points, I think I did make reference to most of them in my opening remarks, but I particularly want to emphasise again that 50 per cent of businesses in Wales will pay no rates at all next year thanks to the support that we provide. Our package of support is worth more than a third of a billion pounds to businesses in rate support, and less than one in five will actually be paying their full liability, because we have such a wide range of general support available.

Now, of course we understand the pressures that businesses are under at the moment, but we'll all be very familiar with the really tough choices that we had to make across Government in setting the budget this year. As a result, we have prioritised public services—the NHS in Wales will receive an increase of 4 per cent. In England it's 1 per cent, and that just speaks to the different choices that we've made as a Welsh Government. But, as I say, the package of support that we do provide is still comprehensive, and the choice this afternoon, Llywydd, is between a 5 per cent increase or a 6.7 per cent increase.

Photo of Elin Jones Elin Jones Plaid Cymru 6:43, 20 February 2024

(Translated)

The proposal is to agree the motion. Does any Member object? [Objection.] There are objections. We will therefore defer voting until voting time.

(Translated)

Voting deferred until voting time.