Small Businesses

2011 Gorffenaf 13 4:28 PM
Gan Peter Black
Cyhoeddwyd yn wreiddiol gan Peter Black a Democratiaid Rhyddfrydol Gorllewin De Cymru

Peter Black: Listening to William Powell talk about Narberth, I had a sense of déjà vu relating to a debate that I took part in last week about Swansea city centre. Swansea city centre is suffering in the same way as many other retail centres-with the possible exception of Cardiff, because of the investment into St David's 2-from the economic depression and related issues. There has been a huge fall-off in trade in those centres for a number of reasons to do with out-of-town shopping centres in Swansea in particular, the growth of internet shopping, as well as a number of others around the fact that many people lack disposable income nowadays. However, among the issues that the traders raised with the council was that of rents and business rates. The council can do something about rents where it is the landlord, but not where the private sector is the landlord. However, the council cannot do anything about business rates, because they do not lie within its power. When I was first elected to Swansea City Council in 1984 that was not the case; at that time the city council set the business rates, took the proceeds and applied them to its revenue in the usual way. That has all changed, and now the rates are collected by the City and County of Swansea, paid into a central pool and redistributed by formula. The level of the rate is set centrally by the Welsh Government. Therefore, although the council is doing everything that it possibly can to assist traders in the city centre, it is unable to influence one of the major costs that those traders face, despite the fact that their revenues are falling off sharply as a result of other issues. In other words, the economic conditions are such that the council should be helping those traders by reducing their rates, but it cannot do that. Therefore, there is a clear case that local authorities should have more control over those rates. I take this opportunity to ask the Minister for business to look at rateable values in Swansea and the rates that businesses are paying, because, if the council cannot do anything, the Government might be able to step in and help on that particular issue.

Mike Hedges: I agree with what Peter Black has just said. Some businessmen with shops in Swansea have said that they are paying higher rates and rents than businesses in comparable places in Cardiff. Some of them are saying that it is cheaper to be located in the new St David's centre than in the centre of Swansea. I do not know the truth of that; I do not know whether Peter Black does.

Peter Black: I do not know the truth of that either, Mike, but that was one of the points that were raised. Clearly, there is no comparison there.

Economic renewal will only occur if the whole of the public sector is working towards that goal. As economists, the Government, and the economic renewal programme make clear, allowing local authorities to keep all or part of the proceeds of economic growth would provide a real incentive to them to develop new businesses in their areas and offer them the flexibility to help local businesses in that regard. It is not just the Liberal Democrats who are saying that; I refer you to Gerry Holtham's second report, in which he says, in relation to business rates, namely non-domestic rates:

'Total pooling of NDR with no recognition of its source leaves councils with little financial incentive to encourage business in their area.'

That has to be a consideration and I hope that the Welsh Government will take that on board. I am sure that many local authorities are dedicated to ensuring a strong local economy, but, when push comes to shove, a financial dividend for economic growth will focus local authorities' minds and provide a quantitative analysis of which policies work and should be taken as best practice. In the past, the Welsh Liberal Democrats have raised the issue of tax increment financing. If local authorities had the power to set business rates, they could use some of that money to borrow against to regenerate areas that are in need of investment.

All in all, there is a strong case for the review of business rates as set out in the motion and, in the meantime, for freezing business rates at their current level, which would mean extending the scheme past 2012, as Plaid Cymru has set out. I support Plaid Cymru's amendment, amendment 2. However, in effect, in that amendment it has condensed the entire motion into three lines. Although brevity is sometimes a virtue, in this case, I think that a bit more detail is helpful and, for that reason, we will not vote for that amendment.

Beth hoffech chi ei wneud nesaf?