Steel gets £20m windfall as Wales hands out tax cut

THE battered Welsh steel industry is to be one of the biggest beneficiaries of the Welsh Assembly’s decision to pass on cuts to business rates immediately. It will enjoy a boost of almost £20million over the next five years.

By contrast, English businesses will have to wait for the reduction to be phased in over four years.

The contrast is starkest in the steel sector, where the huge plants attract high rates. The Port Talbot site in Wales, owned by Tata Steel and under the threat of closure, will enjoy a £1.7million-a-year cut to its rates bill from April. The similarsized Scunthorpe steel plant – renamed British Steel after it was sold by Tata earlier this year – will get a cut of just £360,641 next year.

Business rates consultancy CVS, which made the calculations, said the ten steel plants in England will eventually see a £5.4million-a-year drop in bills. However, because of the transitional arrangements in England, their overall bills will fall by just £1.1million next year.

CVS chief executive Mark Rigby said: ‘The contrast is frankly unbelievable for a sector in such crisis.’

Business rates are calculated on property and rental values, which have changed hugely in many areas since the last revaluation in 2010.

The Government has introduced the transitional scheme to ease the burden on firms facing higher bills. But the Welsh Assembly, which assumed responsibility for business rates in Wales last year as part of devolution, has not followed Westminster’s lead.

Roland Junck, British Steel’s executive chairman, said: ‘I’m sure the move will be welcomed by Welsh steelworkers. It demonstrates the type of support our industry needs.

‘We want to increase productivity and our global competitiveness. All we are asking for is a level playing field. A reduction in business rates for us would be a significant step in the right direction.’

He added: ‘We face much higher business rates than many of our global competitors – some do not pay any at all – and we are operating in a challenging environment. We are already making a profit and that is largely down to the incredible efforts of our employees. However, to be truly sustainable, we do need more Government support.’

Westminster has earmarked £3.4 billion to assist firms struggling with higher than expected bills and is in consultation over how that might be implemented. Firms in London face big rises due to the steep rise in property prices.

‘We are committed to helping all businesses flourish as we make the system fairer up and down the country,’ said a spokesman.