Non-domestic Rates

1. Questions to the Cabinet Secretary for Finance, Constitution and Cabinet Office – in the Senedd at on 15 May 2024.

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Photo of Vikki Howells Vikki Howells Labour

(Translated)

6. Will the Cabinet Secretary provide an update on work to reform the non-domestic rates system? OQ61095

Photo of Rebecca Evans Rebecca Evans Labour 2:09, 15 May 2024

We remain on track to deliver the programme of reforms that I set out for this Senedd term. Several improvements have already been made, including delivering the 2023 revaluation. Through the Local Government Finance (Wales) Bill, we will deliver on the range of specific proposals that we consulted on in 2022.

Photo of Vikki Howells Vikki Howells Labour 2:10, 15 May 2024

Thank you for your answer, Cabinet Secretary. With regard to business rates, amongst the issues most frequently raised with me by constituents is concern at what can feel like an unresponsive system, with there being too long a gap between revaluations. So, could you expand on how the Welsh Government will address this in the Local Government Finance (Wales) Bill, and what mechanisms would you like to introduce to ensure a more flexible, responsive system that supports our small businesses on our high streets?

Photo of Rebecca Evans Rebecca Evans Labour

I'm really grateful to Vikki Howells for raising that, and I know that she's been talking to businesses in her local area a great deal, and they have been expressing concerns about those gaps between revaluations. That's one of the reasons why we're introducing, through our local government finance Bill, three-yearly rolling revaluations now for businesses for non-domestic rates. We think that three years does give that balance between certainty for business, but then also reflecting more up-to-date and current market conditions. So, three years is the number that businesses and their representative bodies have been telling us that they would welcome. I think that that's a particularly positive part of our reforms that we're undertaking.

The 2023 revaluation was surprisingly smooth, so I think that we can take some comfort from how well that revaluation went. We were able to provide, of course, some transitional support for businesses that saw an increase in their bills, but when we do have this cycle of more frequent revaluations, we should see a little less churn.

Photo of Altaf Hussain Altaf Hussain Conservative 2:11, 15 May 2024

Cabinet Secretary, unfortunately, for many hospitality businesses, these reforms will be far too late. The sector is facing a perfect hurricane, in the words of UKHospitality Cymru. By the time the business rates system is reformed, we will have lost many businesses, and many town centres across the country will become ghost towns. Cabinet Secretary, the industry is on its knees. Will you, therefore, take urgent action to support the sector by eliminating non-domestic rates for hospitality businesses until a new fairer system is introduced? Thank you.

Photo of Rebecca Evans Rebecca Evans Labour 2:12, 15 May 2024

I'm afraid I can't eliminate non-domestic rates for a very large sector of our economy here in Wales, just because non-domestic rates—. Let's remember the purpose of those non-domestic rates—they are there to provide vital funding for our public services. So, unless colleagues want to tell me where I need to find the money from elsewhere, or what I need to cut as a response to that, I'm afraid that's not something that I can commit to today.