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No festive joy for struggling high street businesses from draft budget says FSB

Ben Francis, FSB Wales Policy Chair

Responding to the publication of Welsh Government’s Draft Budget, Ben Francis, Wales Policy Chair at FSB stated:

“High street businesses are currently hoping for a successful and busy Christmas period after many difficult years, with businesses continuing to struggle with increasing cost pressures alongside a drop in customer spending. In this climate, Welsh Government’s decision not to implement the same level of business rates support as similar businesses in England is a significant and regrettable blow and some businesses will undoubtedly face difficult choices in the months to come.

FSB had made the case to Welsh Government for a freeze in the business rates multiplier and the extension of the 75% rates relief as a recognition that retail, hospitality and leisure businesses are currently among the most impacted and require that level support to recover and aid wider economic recovery.

Indeed, in their Draft Budget, Welsh Government seem to acknowledge the need for further support by announcing a further ‘Future-proofing’ fund for smaller businesses in the sector. However, without detail on how that fund will be used and against what criteria support will be judged, it’s difficult to make an assessment as to what impact that money might have. As such it is important that this detail be provided to allow businesses to plan accordingly. While ‘future-proofing’ is important, ‘present-proofing’ is the priority of these businesses.

The realities facing our high streets are stark. More than 1 in 6 shops in Wales are vacant and retail sales in October fell by 2.7% on the year. With retail analysists suggesting the next quarter could be even tougher and 83.5% of our members reporting increasing costs, a hike in rates bills in April will place significant additional pressure on these businesses.

We recognise that Welsh Government has sought to extend the same amount of relief across a wider range of businesses and so have ‘spread the available jam’ more thinly. Many businesses will benefit from a cap on the business rate multiplier which is welcome. However, in the coming weeks as the scrutiny of this draft budget takes place, we will need to make an assessment as to whether this draft budget meets the scale of the mission to help support and recover our small business economy, or provides a map toward growing our economy in the future.

We recognise the difficult and unenviable choices facing the Minister and Welsh Government in this Draft Budget. However, as we have consistently argued, economic recovery – and prosperity to support our public services – will only come on the back of the health of the small business economy and a new plan for growing the economy.

Any prospective new First Minister needs to put this front and centre of the task facing their Welsh Government agenda”.