A hike of 4.6% in business rates by the Welsh Assembly Government has drawn criticism from business leaders.
Welsh councils have been told that the provisional multiplier for business rates in 2011/12 will be 42.8 pence in the pound, a 4.6% increase and is based on the Retail Price Index.
The 2010/11 multiplier is 40.9 pence in the pound.
Andrew Diplock, chair of Caerphilly Business Forum, said the organisation’s members are unhappy.
He said: “The overwhelming feeling is that it is not only unfair to pass this burden onto businesses at a time when many are struggling to stay afloat but also that it is counter productive on so many levels.
“There is frustration that many businesses won’t be able to pass this increase on to their customers because they would lose their competitive edge. Bear in mind we have
businesses in Caerphilly whose competitors are based all over the world, from China to the USA, who won’t have to deal with this additional tax.
“There’s also incredulity that it can be levied at a time when businesses are already preparing for a hike in VAT in the new year.
“And there is disappointment that this increase could be ‘justified’ by wheeling out the RPI figures again. These are pretty meaningless in the context we find ourselves in where profit margins have been squeezed to a minimum, wages suppressed and many businesses simply trying to survive.
“The impact of this, taken in isolation, could be to make Caerphilly a less attractive place to do business in, with repercussions on employment prospects for the county borough and all the social issues that ensue from that.
“We really need Caerphilly County Borough Council to pull out all the stops and do everything it can to rebalance this. As our members pointed out, the aim of the council should be to increase tax receipts by encouraging more business – not by increasing the financial pressure on existing businesses.”
Ron Davies, an independent councillor and Plaid Cymru’s candidate for Caerphilly at next year’s Assembly elections, also criticised the hike and singled out Labour’s Social Justice and Local Government Minister Carl Sargeant.
He said: “I don’t think this rise could have come at a worse time for businesses battling to make ends meet. This increase is on top of an almost five per cent hike in the current financial year.
“I know the Welsh Assembly Government has faced significant cuts in its budget as a result of the ConDem government in London. But Carl Sargeant’s action in proposing such a hefty rise on businesses suggests that he is out of touch with the real world.
“I don’t know how a near five per cent rise can be justified in these austere times and my worry is that such an increase could tip some businesses over the edge, leading to more business failures and jobs lost.
“I’m aware of the excellent work of Ieuan Wyn Jones as Deputy First Minister in supporting business and jobs so I would urge Carl Sargeant to reconsider the level of the increase proposed.”
Caerphilly’s Labour AM Jeff Cuthbert said his office was more than willing to local business with their enquiries.
He said: “Ron Davies may want Ieuan Wyn Jones’ job, but perhaps he should lobby his new Plaid colleagues a bit harder, as they are just as much a part of the Welsh Assembly Government as Carl Sargeant is. This decision on business rates, although difficult, was a collective one made by WAG.
“In the meantime, my office is more than happy to help local businesses with any queries that they may have – as I have done on several occasions in the past.”
Unlike council tax, local authorities do not get to keep revenue from business rates. Instead they are collected and paid into the Welsh Assembly’s non-domestic rates pool and redistributed back to local authorities as part of the Local Government Revenue Settlement.