BACKING OUR SMALL BUSINESSES

Our small businesses in Wales make a vitally important contribution to our economy and account for 99% of all businesses in Wales; it is vital we support this sector. Business rates account for a significant part of operating costs for small businesses and as a result prevent businesses from growing, from investing in themselves and in many cases, creating more jobs. We need to remove the burden of business rates and allow our private sector to flourish and create employment opportunities. 

Small businesses are vital for our economy, they form the backbone of our economy and they are vital in terms of spreading economic growth beyond the cities and into our smaller towns like Abergavenny, Chepstow, Caldicot, Monmouth and Usk. If we want our small towns across Wales to be thriving, then we have to support small businesses. Business rates are a burden – they account for a far greater proportion of operating costs for a small business than they do for large businesses.

Plaid has long championed the importance of local economies when it comes to generating national wealth. Every £1 spent in a local business selling local produce is worth twice as much to the economy as £1 spent in a supermarket, due to local reinvestment and spending. As noted by the Campaign for the Preservation of Rural England, every £10 pound spent in a local business circulates at least three times before it leaves the local economy rather than vanishing when spent in the branches of chains.

A Plaid Cymru government would extend the rate relief scheme that we implemented in Government to covers all businesses whose rateable value is £10,000 or less and extend the tapered relief scheme up to £20,000.  Some 90,000 businesses would see a reduction in their business rates as a result and more than 70,000 businesses across Wales would be taken out of the rates system.

Plaid would raise the money, which would go towards paying for this, by mirroring the business rates system, as it currently exists in England where large businesses pay more than small businesses. While larger businesses would pay more, they would still pay less in Wales than they would across the border. The extra money raised through the increased bill for large businesses would raise more than enough to cut bills for small businesses.

GOING FOR GROWTH!

Small businesses are vital for our economy, they form the backbone of our economy and they are vital in terms of spreading economic growth beyond the cities and into our smaller towns like Abergavenny, Chepstow, Caldicot, Monmouth and Usk. If we want our small towns across Wales to be thriving, then we have to support small businesses. Business rates are a burden – they account for a far greater proportion of operating costs for a small business than they do for large businesses.

A Plaid Cymru government would extend the rate relief scheme that we implemented in Government so that it covers all businesses whose rateable value is £15,000 or less.  Some 83,000 businesses would see a reduction in their business rates as a result and more than 70,000 businesses across Wales would be taken out of the rates system altogether - this would cost £35 million.

Plaid would raise the money, which would go towards paying for this, by mirroring the business rates system, as it currently exists in England where large businesses pay more than small businesses. While larger businesses would pay more, they would still pay less in Wales than they would across the border. The extra money raised through the increased bill for large businesses would raise more than enough to cut bills for small businesses

BACKING OUR SMALL BUSINESSES

Small businesses in Wales make a vitally important contribution to our economy and account for 99% of all businesses in Wales; it is vital we support this sector. Business rates account for a significant part of operating costs for small businesses and as a result prevent businesses from growing, from investing in themselves and in many cases, creating more jobs. We need to remove the burden of business rates and allow our private sector to flourish and create employment opportunities. The figures highlight the number of small businesses which are struggling to meet their bills and who, under Plaid Cymru plans, would not have to pay any non-domestic rates.

A Freedom of Information request by the party revealed that more than 3,000 businesses with a rateable value of under £10,000 had liability orders issued against them for non-payment over the past three years, they would be among 70,000 businesses taken out of the rates system. Over 3,000 small businesses in Wales fell into debt over their business rates would be taken out of paying non-domestic rates altogether under plans drawn up by Plaid Cymru. The Party of Wales’s has pledged to scrap business rates for all enterprises with a rateable value of under £10,000 relief with those between £10,000 and £15,000 also seeing their bills reduced.

Plaid has long championed the importance of local economies when it comes to generating national wealth. Every £1 spent in a local business selling local produce is worth twice as much to the economy as £1 spent in a supermarket, due to local reinvestment and spending. As noted by the Campaign for the Preservation of Rural England, every £10 pound spent in a local business circulates at least three times before it leaves the local economy rather than vanishing when spent in the branches of chains.

It is vital to ensure more people have the opportunity to economically support their local town centres across Wales, so we making them the vibrant heart of the community they once were. Over the last 30 years in Monmouth constituency (and elsewhere) we have all seen the damaging economic and social effects of bad shortsighted questionable planning decisions on our small towns. The Welsh Government needs to actively support our town centres and create a more level playing field for small to medium sized local businesses. Our town centres should be the economic heart of our communities, generating local wealth and jobs for our people.

Business Rates in the Gwent area

BLAENAU GWENT

2013 and 2014:Non-domestic rates liability orders (as of January 30 2015): 232

Arrears @ March 31, 2014: £1,233,000

Liability Orders on businesses with rateable value of less than £10,000:  168 (running total as of September 2014):

CAERPHILLY

2013-14:Non-domestic rates liability orders: 229

Arrears @ March 31, 2014: £1,078,399 (year only)

Liability Orders on businesses with rateable value of less than £10,000: 290 over three years

MERTHYR TYDFIL

2013-14:Non-domestic rates liability orders: 76

Arrears @ March 31, 2014: £797,946

Liability Orders on businesses with rateable value of less than £10,000: 53 over three years

MONMOUTHSHIRE

2013-14:Non-domestic rates liability orders: 209

Arrears @ March 31, 2014: £1.6m (gross)

Liability Orders on businesses with rateable value of less than £10,000: 307 over three years

NEWPORT

2013-14:Non-domestic rates liability orders: 310

Arrears @ March 31, 2014: £1.92m

Liability Orders on businesses with rateable value of less than £10,000: 104 over 3 years

TORFAEN

2013-14: Non-domestic rates liability orders: 39

Arrears @ March 31, 2014:  £1,287,084Liability Orders on businesses with rateable value of less than £10,000: 39 over three years

THE WAY TO GO

The news that the number of new limited companies registered in Wales has gone up by more than 20% is good news. Companies House say 469 new firms were registered with them in 2012, when compared with 386 in 2011. This increase is actually higher than the UK average but it has to be balanced by the sobering news that the number of company failures in Wales also rose when they fell on average across the UK.

A number of my friends run their own businesses, so I am fully aware of the pitfalls and the opportunities that can await anyone who goes into business for themselves. With a good idea, a sound business case, timely support and advice it can work out. Our small businesses can create wealth and sustainable employment opportunities for local people and play a significant role at the heart of our communities. Their profits and investments tend to stay within the communities where they are based.

For too many years economic development in Wales has been focused on large scale development of what can be best described a single egg solutions. They promise much in the short to medium term yet often deliver significantly less over the long term, if they survive. The latest figures show that Wales saw a 191% rise in the number of projects, by way of comparison with a 41% increase in Northern Ireland, a 16% rise in Scotland and a 10% increase in England (outside of London).

The statistics have been released by UK Trade andInvestment (UKTI), the Westminster government department responsible for exports and inward investment. There is no breakdown of the number of jobs created or safeguarded (in Wales) by these projects; the BBC says that Welsh government says they created of 2,605 jobs and safeguarded another 4,442 in the 2012/13 financial year.

Despite rise in the number of projects, Wales' share of the UK total inward investment accounts for 4%, is much lower than the high point of the 1980s and 1990s. Now this is good news, but, our focus should be on developing small to medium size local businesses, which are significantly less likely to up sticks and leave for perceived greener pastures and fresh applications of development grants.

We are still too focused on attracting large scale single enterprises, which promise much but deliver significantly less than anticipated. The LG development near Newport, is a good example of an expensive white elephant which promised the usual total of 6,000 jobs and accrued significant public funding (£376 million pounds at the last count) which was committed by the then Welsh Secretary, William Hague.

The promises and the pledges and the public funding  never quite managed to deliver anything like what was promised. While anyone with a basic  understanding of the state of the Korean and the Far Eastern economies at the time that, let alone a basic understanding of where technological developments was going in relation to PC monitor screens, would have put their hands up and said hang on a moment.

What can best be described as a combination of fantasy island economic assessments, a fatally flawed business case and the prospect of looking good with a forthcoming Westminster election looming led to one of the spectacularly duller decisions of recent years being made. The old WDA had in truth never really consistently delivered anything like long term economic stability and much needed long term job opportunities to our communities that it should have done.

The European funding opportunities available to Wales (as a result of economic mismanagement on the part of successive Westminster governments) may well turn out to have been squandered on schemes that fail to deliver measurable results yet manage to deliver fat salaries to the managers. Much of the money has been scammed into dubious schemes and training programmes that fail to deliver the necessary skills that workers and potential workers need to make a decent living in the modern economy.

Anyone who has visited Spain and Ireland prior to the self inflicted banking crash will have seen (and can see) the results of years of European regional investment the question we should be asking is where are the physical assets? By this I mean the things you can literally put your hand on like improved communications (rail, railway stations, etc), broadband infrastructure, etc?

The Westminster, Welsh Office, WDA model of concentrating on attracting branch factory operations of a relative short term duration has failed to develop and sustain our economy. Back between 2007 and 2011 the Plaid driven One Wales Government made significant efforts and tried to think and act differently when it comes to economic development and support for small to medium sized enterprises.

Small businesses should be the life blood of our urban centres, yet, the Federation of Small Businesses (FSB) has long noted that the UK is losing around 2,000 local shops every year and that of this rate of loss is dangerously unacceptable. In a few years unless things change there will be precious few no independent retailers left in business, something that will hammer both consumers and our communities hard as they lose any real choice in the marketplace and lose potential job opportunities.

Now as someone who now and then takes the bus to work and walks through streets that were once the retail heart of Newport (nominally Wales’s third largest city) I can see with my own eyes the economic realities of our situation. Over the last twenty five years the commercial heart of many of our communities has been shattered as a result of a combination of aggressive policies pursued by the larger retail chains, exceptionally poor decision making on the part of local government and central government indifference.

This combined with the rapid growth of unsustainable, ill-thought out of and edge of town retail developments has effectively left no place for the smaller local businesses and retailers. When you factor in parking charges, business rates and the effect of the closure of high street banks and post offices in many of our communities then you can begin to see why many of our smaller businesses and local shopping centres are up against it.

Local small businesses as well as trading with us the consumers, also trade with each other - so the community gets twice the benefit. Money spent by and in local businesses spends on average three times longer in the local economy than that spent with chain stores which is instantly lost to the local economy which in times of recession our communities can ill afford. We really do need to think differently and focus economic development priorities on developing and supporting smaller local businesses who will be rooted in our communities and offer more flexible employment opportunities too our people.

The Welsh Government needs to have the power (and the vision) to remove or reduce business taxes to help boost our businesses, to encourage investment in skills, technology and  workers. If we are going to make Wales a nation of aspiring entrepreneurs and to encourage and enable them, our communities and our economy to flourish we also need to encourage the development of community owned social enterprises.

A few years ago the Rowlands review into the provision of growth capital recognised that an economical vibrant SME sector is vital for economic growth. There has been a lack of provision for companies in Wales who were looking for between £2 and £10 million pounds in capital, this has to change if we are to encourage sustainable economic growth and development.

It’s pretty clear that the present financial market and its institutions have failed to supply sufficient venture capital for the SME sector in Wales. We need a venture capital fund for Wales, which should be established by, but independent of the Welsh Government. Such an independent venture capital fund could raise capital and deliver investment through a co-investment model, with approved private sector partners to our SME sector, where such investment would make a real difference.

Despite nearly 15 years of devolution much of the same old mid to late twentieth century economic thinking lingers at the heart of the Welsh Government when it comes to economic development. There is still far too much focus on vastly expensive one egg, one basket schemes to generate the seemingly standard figure of 6,000 jobs which seems to haunt government press releases whether we are talking about the Severn Barrage, the Severnside airport , the M4 relief road or whatever.

We badly need new ideas not just talk, we need some concrete steps to encourage growth, boost manufacturing industry, support and develop  our small to medium sized enterprises. One positive step would be to end business rates and that's just to start with... otherwise it will just be a case of same old twaddle which will do nothing to help our communities and our economy.

MAKING LOCAL GOVERNMENT WORK FOR WALES

Let's be brutally honest many of our smaller communities, our small and large towns and our cities have suffered in the past from ill-thought out developments and questionable short term economic thinking. Our local small to medium retailers, local businesses and local consumers have suffered accordingly and we the consumers have paid the price with a loss of local services and choice.

Many people have real and serious concerns about the economic future and the character of their communities. We need to ask ourselves some serious questions about who these decisions in relation to redevelopment are being made for? And do our communities really benefit, locally or otherwise, certainly at times it is not us the customers? In the not so recent past local government has hindered economic growth and has damaged the economic vitality of our communities, but, it does not have to be this way.

One way that local government can help, rather than hinder, our small to medium sized enterprises and our communities is by improving procurement practice something that helps create and sustain local jobs. Plaid has called for legislation to be used to ensure that Welsh public sector contracts are allocated wisely to maximize job creation and investment opportunities here in Wales. The Welsh Government has previously announced a National Procurement Service, Plaid Cymru has rightly warned that unless further concrete action is taken then we in Wales will see savings but we will not see the full benefits.

The Party of Wales leader Leanne Wood said:

“Procurement is one of the successes of the National Assembly. By ensuring that Welsh public money is spend in the Welsh economy then we can create and support employment. A Plaid Cymru government would work towards achieving a target of 75% local procurement in Wales because we know that this could create 46,000 jobs here. That would make a huge dent in the unemployment figures.

“Spending that money with local companies in our local communities can also have a significant knock-on investment effect. By creating the demand we will also be improving the skills of our workforce, will be increasing the number of jobs, and will be supporting our local and national economies.

“Many businesses have told us that the process of bidding for work needs to be simplified, and for that reason, at a local government level in particular, we have argued for contracts to be unbundled. We have also worked to remove barriers to make it easier for small, local firms to apply for contracts. It’s about supporting our companies and sustaining our economy.

“Procurement is one way in which Plaid Cymru has made a real difference to employment levels and economic performance, and we will continue to make the case for ensuring that the money of Welsh taxpayers is used as wisely as possible, for the sake of our communities.”

PUTTING PARTY BEFORE PUBLIC INTEREST

It will come as no surprise to those who know them that Labour in Wales councillors in Newport have voted against motion to keep free parking in Newport Town centre. So much for the 4,011 people who signed the petition (organised by the South Wales Argus) calling on Newport city council to think again. The Argus reported that Labour in Wales councillor for Gaer, Herbie Thomas, told the council had to stop kidding themselves and that no one shopped in the city centre anymore. He was reported as saying: "The town centre is finished. Let's not kid ourselves anymore. People shop differently now." So much for Labour caring for Newport. On Tuesday evening after some spirited exchanges the motion to oppose the plan to introduce charging for parking was voted down by 32 against and 10 votes (with one Labour abstention).

GOING THE EXTRA MILE

Plaid has rightly called for an urgent extension of support for small businesses in Wales in order to safeguard jobs and livelihoods during the recession. Welsh Government support for small to medium sized enterprises (SMEs) is due to run out in March 2013 – and the doubts over future support are leading to uncertainty for businesses throughout Wales. The Welsh Government needs to commit itself to extending support for SMEs beyond March 2013. Plaid has renewed its call for government support to be extended to help more businesses.　Plaid’s Small Business Job Protection Scheme would give financial help to extra 8,000 businesses in Wales by offering full relief from Business rates to businesses with a rateable value of up to £12,000 and tapered support up to a rateable value of £18,000. Plaid has argued that revised GDP figures that show that the double dip recession is even deeper that initially feared something that make it exceptionally important for the Welsh government to take urgent action on business rates.　The party has also said that the Welsh government should be investing in capital projects which would help to create and safeguard thousands of jobs across all of Wales.　

Plaid Cymru AM, Rhodri Glyn Thomas, said:

"It is imperative that the Labour Welsh Government takes urgent action in light of yet another stark warning about the depth and severity of this recession. The revised GDP figures show that the double dip recession is even deeper that initially feared and that is very worrying news indeed for the people of Wales especially as the worst of the ConDem cuts is still to come.

"As well as the general economic conditions which are making life very difficult indeed for small businesses, there is currently great uncertainty about how much support they will get from the Welsh Government after March next year. We’re now less than 9 months away and businesses do not know what their business rate bills will be for next year. The Labour Welsh Government is making it increasingly difficult for businesses to plan – and that is leading to uncertainty about jobs as a result.　

"Small business owners have been doing all they can to maintain staffing levels during the economic crisis, yet their efforts are under threat from Labour’s lethargy.　This situation needs urgent action if jobs and livelihoods are to be safeguarded.　

"It’s bad enough that Labour ministers have refused to commit to Plaid Cymru’s plan to support small businesses during the economic crisis. We would extend support to more than 8,000 companies in Wales that do not currently receive any tax relief at all.　But currently, Labour won’t even extend the current level of support – and if this uncertainty continues, there is a clear danger that further jobs will be lost."　

CAN WE MAKE IT BETTER?

News that the number of people visiting high streets and shopping centres has fallen more in Wales than any other part of the UK sadly comes as no surprise. On my way to work in my home town of Newport, I walk past far too many empty or closed but partially furnished shops every day. The British Retail Consortium has revealed that footfall in Welsh towns and cities has dropped by 9.2% between April and July, the UK average footfall was down 1%.

Part of this is down to the recession, part of it down to the over reliance of local economies by chain retail stores and supermarkets, not to mention the cumulative damage that has been done since the 1980's with the growth of out of town or edge of town retail developments. Take my home town of Newport, where two Newport superstores set to open new stores barely a mile apart (within weeks of each other) and may create 650 new jobs. Morrisons in Lysaghts and redeveloped Tesco Extra in Spytty (both in the south of Newport) are due to open their doors in the autumn offering a combined 162,432 square feet of shopping space and employing up to 1,000 people.

Newport currently has 23 supermarkets, a significant number of which don't just sell food, for the record, we have:

• seven Tescos
• three Icelands
• two Asdas
• two Morrisons
• three Cooperative food stores 
• one Sainsbury store 
• three Lidl and 
• two Aldi supermarkets. 

Some of the larger supermarkets operating within the Newport area have been specifically targeting the smaller more local shopping centres. One of the consequences of excessive economic impact on local economies from the expansion of the supermarket sector is a loss of jobs as local businesses go under. Supermarket domination of the retail trade puts the local food infrastructure at risk threatening the viability of local wholesalers and small firms and the associated jobs in other businesses that offer support services i.e. banking, financial services, building work, packaging, etc.

The economic consequences of the generational failure to create a level playing field for local small businesses (not just in Newport) over the last twenty five years. This has been aggravated by a failure to redevelop Newport's commercial centre and the failure to restrict out of town developments; something that is now beginning to reap some pretty grim economic consequences.

A study by the National Retail Planning Forum in 1998 of 93 new superstores found that each one resulted in a net loss of 270 local jobs. The Federation of Small Businesses (FSB) noted that the UK is losing approximately 2,000 local shops every year and by 2015 (if this rate of loss is sustained) there there will be no independent retailers left in business.

This hits small businesses, consumers and our communities hard as they lose any real choice in the marketplace. Until fairly recently many or our smaller and larger towns, managed to retain a reasonably rich mix of local shops, small businesses and local suppliers. They have suffered in recent years as the usual suspects in the shape of “identikit” chain stores have run riot and replicated themselves across our nation's high streets.

Our Local Authorities (and here Newport is pretty typical) have been too often tempted as developers offering includes, sweeteners and inducements to ease the passage of proposed developments. They may be advised of the financial consequences of planning applications being taken to appeal if permission is refused and our elected representatives have been silenced by often dubious promises of potential jobs - so much for local democracy!

Local Authorities have failed to adequately research the implications of large scale developments on local retail needs within their development plans. If retailing needs have not been assessed then it’s pretty difficult to amend or refuse any potentially damaging planning applications from wealthy large developers, at which point local small businesses and consumers begin to pay the price.

Despite the lip service about improving the vitality and viability of our town centres, many out of town retail developments have consistently undermined this aim. Local authorities have turned a blind eye to the economic and social consequences of out of town or edge of town retail developments. The economic reality has fallen well short of the verbal aspiration, just look at the damage that has been done to Abergavenny, Chepstow, Monmouth, Newport and elsewhere.

How can local regeneration schemes ever hope to work, once the commercial heart of our high streets has already been seriously damaged. I don't have a problem with redevelopment but it's important to include an element for local retail and small businesses. Our small businesses end up being disadvantaged not just because of their inability to compete on level terms with the increasingly aggressive tactics of supermarkets and retail chains who are chasing an ever larger market share, but, because they get pushed out of the high street.

More than ever, our planners and our elected representatives at all levels need to think about the long term economic consequences of planning decisions. We need to take the longer term view, rather than get fixated on short term financial gains and questionable inducements from developers and the often hyped up promise of jobs.

Locally, in Newport, Labour ran the show from 1981 until 2004, effectively presiding over the run down of the town centre and a rapid expansion of out of town shopping centres, which to be fair even if they had opposed no doubt the Conservative run Welsh Office would have retrospectively approved. Yet even with New Labour in power in Westminster from 1997 and occasionally in Cardiff (from 1999) the local Labour run county council did little other than to sit pretty on the top of the pile.

They paid the price in 2004, being swept from office as New Labour's unpopularity grew. They lost control for the first time since 1979, but managed to run down the finances before election day. Now Labour in Newport is puring like a cat waiting for the cream, as they expect to be swept back into office, on the back of an unpopular Conservative - Lib Democrat coalition government, so they can get their noses back in the trough.

Next May, Newport goes to the polls and the election should be about more than merely throwing out the current lot out because of the record of their government in Westminster. Especially if the electorate is merely going to replace them with another lot who ran the town into the ground, when they ran the place previously. Repeating the mistakes of the past won't solve the current problems that beset our town at the moment, come May 2012 we need real change.