Ahead of the publication of the Welsh Government’s Draft Budget on December 10th, the Federation of Small Businesses in Wales is urging the Welsh Government to recognise that businesses are operating in difficult conditions by continuing vital support on business rates in 2025/26.
Wales’s largest business group are making the case for extending the Retail, Leisure and Hospitality Rates Relief, at least at the existing 40% level, warning that these sectors have experienced a prolonged period of high-costs and depressed customer spending.
Additionally, FSB is calling for the multiplier used to calculate rates to be frozen for 2025/26, saying that this would provide immediate support and help businesses position themselves to invest in and expand their business in the future.
Ben Cottam, Head of Wales at the Federation of Small Businesses, said:
“The economic climate remains challenging for many small businesses. The Draft Budget is a crucial opportunity for the Welsh Government to demonstrate that it has heard their concerns and is committed to supporting them through this period.
“The retail, hospitality, and leisure sectors have been particularly hard-hit. With low consumer spending and disproportionately high costs still affecting some businesses’ viability, it is critical that the rates relief for these sectors is extended, at the very least at 40%. These sectors are not only vital pillars of the Welsh economy but also social hubs, particularly in rural communities.
“The Welsh Government can also gear the economy towards growth by freezing the multiplier used to calculate business rates, providing immediate support and helping businesses position themselves to invest, innovate, and create jobs, ultimately spreading prosperity throughout Welsh communities.”
Trudy Davies, owner of the independent newsagents Woosnam & Davies News, said:
“As a community-focused business in Llanidloes, I’ve always strived to be the shop with a heart and am proud to have received awards for local projects and initiatives.
“However, the current economic climate is incredibly challenging for small businesses. Rising costs and the subsequent pressure on incomes is putting immense strain on us and our customers. Whilst we use our resources to try and help the community by paying our staff a portion of their time to do charitable work and using our spaces to facilitate community projects, it is getting harder and harder to keep momentum going.
“At least maintaining the retail, hospitality and retail rates relief is crucial for our survival and the vitality of our rural communities. Given the severity of the situation, there’s a strong case for increasing this relief. By doing so, the Welsh Government can recognise the invaluable contributions we make to our local economies, support local jobs and ensure the survival of our high streets.”
Justin Horton, owner of the ethical kids-wear, gift and toy retail store Funky Monkey, said:
“Retail remains critical to our town centres. Independent and small shops are at the heart and soul of our communities, we’re what makes towns interesting and exciting places to be. Not only do we provide sustainable, quality employment for local people, but we also support local producers by selling their products in our shop – giving them the opportunity to break into the market.
“The pandemic and subsequent cost-of-living crisis have severely impacted High Street retailers. While we at Funky Monkey have innovated our offer and repositioned our business model to a lower cost base and more affordable price structure, retail businesses need support to help create the town centre spaces that we want to see.
“Business rates continue to be a blunt tool and urgently needs reform to create a level playing field for all retailers. The experiences of recent years should make it clear that vital reliefs should not be removed until the business rates system is reviewed, and businesses are able to reposition themselves for the next stages of economic recovery.”
John Stanley Evans, owner and manager of the Black Boy Inn, said:
“Small businesses are vital to our economy and communities, providing essential jobs, goods, and services. In Wales, they play a crucial role in preserving the Welsh language, particularly in Welsh-speaking heartlands. I’m proud to be a part of this community.
“The 40% business rates relief has helped hospitality businesses like mine to keep our doors open, retain staff, and continue to serve our community. If this crucial support is removed now before our industry has had an opportunity to re-build, many pubs, restaurants, and hotels will struggle to survive. This relief isn’t just about businesses; it’s about preserving the heart and soul of our towns and villages.”
