The CBI is calling for fundamental reform of the business rates system in Wales to support firms and kick-start private investment that will revitalise local communities.
In a response to the Welsh Government’s consultation on business rates, CBI Wales says that targeted support for Welsh hospitality and leisure firms must remain in place after it is due to end in April. Accessing this funding pot will allow the hard-pressed sector to compete with similar competitors in England that are set to retain financial help from the UK Government beyond April.
Wales’ leading business group is also asking the Welsh Government to abandon plans for higher charges on business premises valued at £100,000 or above, arguing that these charges deter larger companies from driving forward investment plans.
The CBI Wales submission calls for:
- Fundamental structural reform of the business rates system and the removal of barriers to investment.
- A redesign of business rates to incentivise investment and align with planning and infrastructure policy, including enhanced relief for firms that carry out improvements to their premises.
- De-linking of the business rates multiplier from inflation within each revaluation cycle. The current policy of uprating the business rates multiplier every year by the Consumer Price Index (CPI) inflation measure adds to the cost burden facing firms and bakes in business uncertainty
Russell Greenslade, Director, CBI Wales, said:
“The local business rates systems contains fundamental challenges that the Welsh Government must address now or risk damaging the competitiveness of the Welsh economy. It’s time to stop tinkering around the edges and press ahead with fundamental reform of an archaic system that is holding back enterprise and acting as a handbrake on the economic growth the country badly needs.
“The urgency of this situation has only been increased by the publication of the UK Government’s Interim Report on Transforming Business Rates – with English firms now set for continued access to financial support that Welsh counterparts will miss out on come April. With high operating costs continuing to bite, continued access to targeted reliefs for Welsh hospitality and leisure business properties is a must.
“Plans for a lower business rates multiplier for smaller firms will benefit the sector but imposing higher non-domestic rating for properties valued at £100,000 risks hindering investment. It also creates additional red-tape for larger firms that have a ‘bricks and mortar’ presence in high streets and retail parks.”
