Exiting the EU: Businesses in Wales

Liz Saville Roberts Excerpts

Wednesday 14th December 2016 Westminster Hall

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Diolch yn fawr. I thank the hon. Member for Ogmore (Chris Elmore) for securing this important debate. It is a pleasure to serve under your chairmanship, Mr McCabe. We find ourselves in a situation whereby there is a real risk that the UK Government will set sail on a course that is counter to the interests of Wales. The way in which we exit the EU is clearly still an ongoing fight. My priority is to argue for the least damaging option for the Welsh economy, which includes campaigning for the best possible outcomes for businesses across Wales and in my constituency.

Plaid Cymru has been united and consistent in its campaign to maintain membership of the single market and customs union from the very beginning. That is by far the least damaging option for the Welsh economy, first because of the wide-reaching benefits that being a single market and customs union member has for trade in Wales as an exporting economy. Of course, Wales has an annual goods trade surplus of £5 million whereas the UK has a deficit. Secondly, continued membership would enable Wales to qualify for certain cross-border and transnational programmes that promote research and innovation, both of which are integral to a dynamic and entrepreneurial business community.

The last report of the Federation of Small Businesses’ UK small business index showed that, for the first time in four years, more businesses were pessimistic than positive about the future. That was the third quarter in a row in which there had been a downturn in confidence. A glimmer of hope is that 55% of the businesses stated they wanted to grow in the coming year, which shows that ambition is still strong. Businesses want to prosper and, of course, they will do that only if they have the nurture they require, which only Government can provide.

Having spoken to various stakeholders in my constituency, it is clear that the certainty and stability of the UK market has taken a hit. They are very much alert to the fact that the forthcoming negotiations will have long-term implications across the country. The Federation of German Industry in the UK, which represents German companies in the UK, has representatives in my constituency who are particularly concerned about the loss of confidence in the UK market. Among those companies, CeKa, long-established in Pwllheli, has expressed clear apprehension about the volatile exchange rate. It is also concerned about cost increases from possible new tariff and non-tariff barriers. The Government should be doing all they can to mitigate those uncertainties now. We could achieve that by remaining part of the single market and customs union.

SMEs are the backbone of the Welsh economy and, with the right support, they can be adaptable, responsive and resilient. When handled well, they have every potential to flourish as one of our most important assets in Wales. We need to put a support framework in place now and do everything we can to help them weather the storm.

Continuing with the German theme, Plaid Cymru has long emphasised the need for a Welsh “Mittelstand”—that is the term used to describe indigenous medium-sized firms in German-speaking countries. Such companies are locally grounded but successful exporters, with strong brands in specialised niches and with long-term growth potential. They characterise one of the strongest and most resilient global economies.

Another area of concern for a company in my constituency, which is of substantial significance to the local economy, is the uncertainty surrounding that which will replace the rural development programme and, for that matter, the common agricultural policy. South Caernarfon Creameries employs 130 staff and also has 130 suppliers selling Welsh milk from Welsh farms. I emphasise that it collects milk from farms across Wales. As a result, the creamery generates at least £30 million a year for the local economy. It has recently expanded as a result of moneys provided by the EU and is planning on doing so once more. Since the vote to leave the European Union, however, the Government have failed to shed any light on how they intend to compensate for the millions of pounds lost.

[Kirsten Oswald (East Renfrewshire) (SNP)]

It is interesting to hear how South Caernarfon Creameries, which is of great significance to the rural economy in the hon. Lady’s constituency, has relied on money generated by the EU for expansion. Will she join me in expressing concern about the way in which the common agricultural policy is repatriated and implemented in the eventuality of the UK leaving the EU?

[Liz Saville Roberts]

I share the hon. Lady’s concern, not least because the National Farmers Union has presented evidence to the Welsh Assembly that indicates that if the money that reaches Wales from the common agricultural policy were to be Barnettised—to go through the Barnett formula—that would result in a 40% decrease in the money reaching Wales.

To return to the creamery issue, we have yet to see any real clarity on how that will be addressed, and that is of considerable importance to anyone involved in agriculture and the rural economy. As we know, Wales is a net beneficiary from the EU to the tune of £79 per individual a year. Businesses must not be left second-guessing where their future lies and how they can plan ahead.

I will refer specifically to business rates. Businesses in Gwynedd have experienced an average increase of 8.9%, which I believe is the second highest after the county of the Under-Secretary of State for Wales, the hon. Member for Aberconwy (Guto Bebb), who will address us anon. I join my Assembly colleagues in pressing Labour’s Welsh Government to investigate all available powers to ensure that business rates do not penalise businesses. For example, they could use index business rate multipliers to the consumer prices index rather than the retail prices index; variable multipliers, so that small businesses are not disproportionately taxed; three-yearly revaluations, because Gwynedd waited eight years for its most recent revaluation, which had a considerable impact on the increase; and an equitable valuations appeals process. In addition, I strongly urge the Welsh Labour Government to consider adopting Plaid Cymru’s business rates support scheme, which would be likely to benefit tens of thousands of businesses across Wales.

[Ian C. Lucas]

I want to make the point that the delay in the revaluation was because of a decision by the UK Conservative Government. It was nothing to do with the Welsh Labour Government.

[Liz Saville Roberts]

I emphasise that business rates are devolved and that there is great potential for the Welsh Government to use that as a means to support business. Businesses are seeing 100% increases in their business rates valuations under the present arrangements, and that is extremely difficult for them. Plaid Cymru’s scheme would mean that all businesses valued at £15,000 or less would benefit, and those valued at under £10,000 would not pay anything at all. That would be likely to affect 80% of businesses in Wales, and I think some 70,000 would end up paying no business rates at all, which, knowing my local businesses, I am sure would be greatly welcomed.

Businesses are the backbone of the Welsh economy, and with the right support they can be resilient. To enable that, the UK Government need to come clean on their strategy and Labour’s Welsh Government need to use their devolved powers creatively and boldly to do everything to enable Welsh businesses to weather the storm. Every possible safety net must be put in place to mitigate the potentially tempestuous period in front of us, and both the UK Government and the Welsh Government should have a plan to ensure the long-term resilience of Wales.