Welsh Government urged to boost business rate relief to protect small businesses from NI hike

Plaid Cymru is urging the Welsh Government to restore business rate relief to 75% to help protect small business from the impact of the increase to employer National Insurance (NI) contributions announced by the Chancellor last week.

Rate relief was cut from the 75%, introduced during the Covid pandemic, to 40% in April.

Announcing the change in the budget for this current financial year, the Welsh Government said 75% was a temporary measure, which was “never intended to continue indefinitely”.

Relief remains at 75% in England, where business rates are set by the UK government.

Consequential funding

Plaid Cymru Finance spokesperson Heledd Fychan is calling for the Welsh Government to fund the return to the higher rate from the £1.7 billion in consequential payments received as a result of the UK Government Budget.

According to the Welsh Government, returning the rate to 75% would cost an extra £50 million.

Ms Fychan said small businesses in Wales were facing a “double whammy” considering the cuts made to business rate relief made in Wales earlier this year, alongside the NI  contribution hike announced by the Chancellor.

Rachel Reeves increased the National Insurance contributions made by employers from 13.8% to 15% and the threshold at which employers start paying the tax on each employee’s salary decreased from £9,100 per year to £5,000.

Plaid Cymru said the policy will have an adverse effect on small businesses in Wales which account for 99% of the sector.

The Office for Budget Responsibility has confirmed that real wage growth and living standards will stall as a result of these measures.

Struggling

Heledd Fychan said: “Wales’ economy is struggling, with economic inactivity here the second highest of the UK nations and regions, and unemployment the highest in the UK. A situation that will only be worsened by Labour’s increase in National Insurance contributions made by employers.

These raises, coupled with the cuts to business rate relief earlier this year, result in a double whammy to small businesses and high streets in Wales, and therefore has a disproportionate impact on Welsh businesses.

“Labour like to call themselves the party of business, and they claim that the latest Budget has given them more money to spend. It’s time they proved this, by supporting our small businesses in Wales by restoring the business rate relief to 75%.

“Wales’ economy is dependent on the small businesses who employ our workers and line our high streets. They are currently being let down by Labour, both in Wales and in Westminster. Plaid Cymru will always back Welsh businesses and will grant them the support they need to thrive.

“Strengthening our small businesses, growing our economy, and putting more money in people’s pockets will be a top priority for a Plaid Cymru government in contrast to the Labour Government who have overseen the decline of living standards, the decline in industry, and decline in our economy.”

A Welsh Government spokesperson responded: “We recognise the pressures faced by businesses in Wales and will consider our spending decisions as we develop our Draft Budget in the weeks ahead”.

This post was originally published on here