Welsh shops and restaurants to get business rate help

Welsh shops, leisure venues, restaurants and bars will get extra help with business rates next year, matching support offered in England.

Relief for the industries, which received significant help during the pandemic, will be increased from 50% to 75% from April.

Wales will also follow England in freezing the rate that companies pay.

But researchers at Cardiff University have questioned whether it is the right approach.

The Welsh government said the move, which was welcomed by business groups, is aimed to help with higher costs.

It comes ahead of the Welsh government budget on Tuesday, when Cardiff ministers will announce their spending plans in areas such as health, education and councils.

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Welsh ministers had received additional cash as a result of decisions on business rates taken by the UK government for England.

Exact figures were not published, but academics at Cardiff University estimated it may amount to £389m over two years.

A report on the Welsh budget by Cardiff University, published before the decision was made, said the "blunt" approach to targeting support for retail, leisure and hospitality could be justified during the pandemic.

It added: "However, it is less clear whether this approach suffices now, especially as many other vulnerable sectors (including public and third-sector organisations with fixed incomes) will be left unsupported when the Energy Bill Relief Scheme ends."

The energy relief scheme for businesses and organisations ends in April.

The Welsh government said the package was worth £460m. It has also announced extra support will be made available for firms that face increased payments because their property has been revalued.

The last 18 months were supposed to be good for business. People who had kept their pubs, restaurants and gyms alive during Covid restrictions were looking forward to making money again.

But the soaring costs of materials and energy, and shortages of staff, have made life almost unbearably difficult for some. Pubs and restaurants are already closing because the costs they face are too high to keep going.

Small and medium sized business owners have consistently asked for support in the form of cuts to business rates, especially with a recession looming.

Reducing rates is one of the few levers the Welsh government can pull which will have a material impact on the cost of doing business on Wales.

While other pressures continue to make life difficult, the decision to reduce rates by as much as 75% for some sectors gives a degree of certainty when so many other costs remain unknown.

Sara Jones, head of the Welsh Retail Consortium, said: "This is a welcome cashflow and confidence fillip for the industry at a time when it is under immense pressure."

Big business lobby group, CBI Wales, said it was a "glimmer" of good news.

"Thousands of businesses face not only an unprecedented increase of around 10% in their business rates bill this April, but new property revaluations will mean a further increase in their overheads at the worst possible time," the group added.

The Federation of Small Business in Wales said it would "go some way to alleviate the pressure small firms are facing".

Minister for Finance and Local Government, Rebecca Evans said: "We want businesses to know now that we will continue to apply substantial discounts to their rates bills, and that this package of support will help businesses to thrive in the hard times we know they are facing."

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