‘140% business rate rise will close the high street’ warns restaurant manager

Richard Evans Local Democracy Reporter

Businesses owners fear they could go bankrupt following the Welsh Government’s announcement of a huge rise in business rates.

Finance minister Rebecca Evans announced this week that COVID rate relief for retail, leisure and hospitality sectors would be reduced from 75% to 40% from April 1 whilst increasing rates across the board by 5%.

‘Scandalous’

Colwyn Bay town councillor Phil Ashe is the chairman of the Llandudno Pub Watch scheme and the vice-chair of West Conwy Pub Watch.

Councillor Ashe recently made headlines after saying that Mark Drakeford would struggle to get a pint in dozens of north Wales pubs after he steps back from frontline politics, claiming that businesses have been a ‘punching bag’ for for Labour’s policies.

Explaining how he feels the increase in rates would affect trade, he said: “One of our properties was paying, pre-COVID, £3,500 in business rates (a month). Because of the 75% reduction, the last few years, we’ve only been paying £875 a month,” said the Tory councillor.

“Now they are cutting that to 40%, so if you reduce £3,500 by 40%, in real terms I’m going to be paying £2,100. That is an increase from £875 to £2,100, so every business is facing an increase of 140%, which is absolutely scandalous.

“It will close businesses. This is not just pubs. It is shops and retail as well. People are already bailing on Colwyn Bay. I’m really concerned. So businesses that are already struggling are going to be hit by a 140% increase on their business rates.

“Business rates are the biggest cost. But the business rates are based on values of 20 years ago when town centres were thriving. Business owners should have been prewarned so they can build back up gradually, so reduce the rate to 65% this year, and then 55% the following year.”

He added: “You can’t increase business rates by 140% overnight. I don’t understand why, every time the Welsh Government decide on a new policy, they batter the tourist sector. I don’t understand what it is they’ve got against this sector.”

‘Is there any point even trying?’

Jack Gough has run Fat Jack’s, an American restaurant on Rhos Road in Rhos on Sea, for the past year. Jack said he was aware of several businesses going bust in recent months due to inflation and the cost-of-living crisis.

“Business at the moment is harder than ever,” he said.

“With the cost-of-living crisis, people aren’t spending as much anyway with water and gas and electric going up. This increase of 140%, small businesses are crippled enough as it is. With this kind of increase, is there any point even trying anymore? It will be the end of local high streets.

“There will be no small businesses anymore. Look at Colwyn Bay. There have been five businesses that have gone bankrupt in the last two months – and others in Llandudno too. We are fighting a losing battle. If this goes ahead, I will honestly consider closing and getting an actual job because I wouldn’t be making any money.”

A Welsh Government spokeswoman said their rate relief system was ‘generous’.

“We are providing a package of rates support worth £134m next year on top of our permanent relief schemes, which are worth £250m a year. Thanks to our generous system of full reliefs, almost half of ratepayers, including thousands of small businesses across Wales, do not pay rates at all,” she said.

“We are providing a fifth successive year of support for retail, leisure, and hospitality businesses with their rates bills, at a cost of £78m. This builds on the almost £1bn of support provided in rates relief schemes to these sectors since 2020-21. A new £20m capital fund will also be developed for 2024-25 to provide support to help retail, leisure, and hospitality businesses future-proof their businesses.”

She added: “We have taken the decision to cap the increase to the non-domestic rates multiplier for 2024-25 to 5%, at a recurring annual cost to the Welsh budget of £18m. This is the maximum level of support affordable using all of the consequential funding which came to Wales as a result of decisions relating to the multiplier announced in the UK Government’s Autumn Statement.”