New business rates initiatives put jobs and growth first

A £20million business rate scheme for Welsh Enterprise Zones; a £1.5million annual scheme to support renewable energy producers; plus a new Welsh Government fund to support the creation Business Improvement Districts in Wales, are among the new initiatives announced today by Welsh Labour’s Business Minister, Edwina Hart, as part of the Welsh Government’s “overwhelmingly positive” response to a review of Business Rates in Wales.

The Welsh Labour Government has said that it agrees with the findings of the ‘Business Rates Wales Review Group.’ In response to the Business Rates Review, the Minister announced:

• £20million of funding – from January 2013 – for Business Rate incentives in all seven Enterprise Zones focussed on new start-ups or SMEs that are expanding and increasing their permanent workforce. The Welsh Government is matching the UK Government consequential with £10 million;
• £1.5 million of annual funding – from January 2013 – for Renewable Energy Producers to support expansion of the sector and Wales’ renewable energy capacity;
• Jointly with the Minister for Housing, Regeneration and Heritage, a £200,000 fund to encourage the development of Business Improvement Districts (BIDs) in Wales over the next three years;
• The Welsh Government is to press the UK Government to continue the Small Business Rate Relief Scheme and propose innovative changes to the Empty Property Rates regime, based on the recommendations of the report;
• The Minister for Environment and Sustainable Development has written to the UK Government to propose improving relief available for businesses that invest in renewable energy;
• The Welsh Government will work with local authorities in Wales and encourage them to use their powers of discretionary rate relief;
• Revamped Welsh Government websites will improve the accessibility of information on key business rates issues;
• The Valuation Office Agency will look at reviewing its guidance on material changes in circumstances.

The Business Minister also announced a number of actions the Welsh Government would undertake over the next year as a result of the Review. Edwina Hart said:

• “If the UK Government fails to examine ways to improve the current Empty Property Rates regime – then we will examine what we can do;
• “If business rates are devolved, we will consider the model of local retention of rates;
• “We will monitor the effectiveness of Tax Increment Financing across the UK;
• “I have asked the Minister for Environment and Sustainable Development to look at how the playing field between out-of-town and town centre parking could be levelled;
• “The First Minister and I are concerned about the rising costs for energy intensive industries and we will look to see if there are ways of supporting these and the costs they face;
• “I have asked Professor Brian Morgan and Juliet Luporini to bring business and charities together to examine charity relief and to consider whether reliefs could support social enterprises and credit unions.”

The Welsh Government also agrees with the Group that the Silk Commission will need to consider issues relating to the devolution of business rates and the local retention of business rates as part of the whole funding system for Wales. The Group will also be asked to further examine the effectiveness of schemes introduced in Northern Ireland and Scotland to bring empty properties back into use. In addition, the Review Group will consider the implications of the UK Government’s decision to postpone the revaluation exercise that was due to come into force in England 2015 until 2017 and has been tasked with coming up with innovative proposals to encourage development through rate relief following a response from the Construction Sector Panel.

The Business Rates Review, published in June, was a result of the task and finish group established by the Minister and headed by Professor Brian Morgan, to examine whether the Business Rates regime can be used as a lever for economic growth in Wales.