Senedd rejects calls to ‘eliminate’ rates for small businesses

Chris Haines, ICNN Senedd reporter

A Conservative call to abolish rates for all small businesses in Wales has been voted down by the Senedd amid warnings the tax burden is “hollowing out” high streets.

Tory Senedd members urged the Welsh Government to scrap business rates entirely for the smallest businesses to give them “breathing space” amid a record wave of closures.

Samuel Kurtz claimed Wales has the “least competitive” business rates in Britain coupled with the highest unemployment in the UK and the lowest take-home pay.

“This is not the framework of a thriving economy,” he said, warning of an “economic doom loop” following November’s UK autumn budget.

Mr Kurtz, the Conservatives’ shadow economy secretary, told the Senedd high streets will be “hollowed out” and communities “left poorer” without radical reform.

Leading Wednesday’s (December 10) debate, Mr Kurtz described a business rates revaluation as the “final blow” for many businesses.

“Countless small firms have seen their valuations double, triple or even quadruple,” he said. “One business owner told me recently that her monthly bill will rise by £8,000 – eight grand. For a small business, that’s completely unsustainable and untenable.”

Luke Fletcher, Plaid Cymru’s shadow economy secretary, welcomed the introduction of differential multipliers – a key determinant of bills – for high-street shops in Wales.

But he criticised the Welsh Government for excluding the hospitality industry from the lower rate multiplier, costing the typical pub an extra £6,800 a year.

“To not include hospitality… was a massive misstep by the government,” he said.

Rhys ab Owen, an independent, pointed out that Wales has had the highest percentage of small businesses closing since 2020 as he called for a VAT cut for hospitality businesses.

Conservative Joel James warned high streets are in a perilous state, with the Labour UK Government’s increase in employers’ national insurance “killing businesses”.

‘Suffocated’

His colleague Gareth Davies painted a bleak picture of a “decimated” hospitality sector, warning a pub closes every day. He suggested small businesses are being “suffocated” by “punishing” policies at both ends of the M4.

Responding to the debate, Rebecca Evans defended the Welsh Government’s record, arguing the economic environment has improved despite challenges such as inflation.

Wales’ economy secretary pointed to existing support which she said protects thousands of small businesses from bigger bills.

She told Senedd members: “Our small business rates relief scheme provides over £140m of relief annually to around 70,000 properties across Wales, with over 50,000 of these receiving 100% relief and paying nothing at all.”

The Tory motion, which also called for free parking in town centres and the reversal of tourism tax plans, was voted down 34-12 with one abstention. Labour and Plaid Cymru amendments were also rejected as Senedd members failed to reach any agreement.