Welsh Government should take action to support the rural economy alongside the UK Spring Statement
The Welsh Government must play its’ part in supporting the rural economy as the cost-of-living and running a business crisis is upon us
“The Welsh Government must play its’ part in supporting the rural economy as the cost-of-living and running a business crisis is upon us,” says Nigel Hollett, Director, CLA Cymru.
“Price-rises are severely felt in Welsh rural areas where fuel and energy prices are always high and wages are low. The uncertainty caused by the tragic international circumstances is set to continue to add to the pressure on the rural economy – parts of which are barely recovered from pandemic restrictions. Fuel, fertiliser and materials costs for farms are continue to soar. Management of the economy and agriculture – already facing profound uncertainty – are the responsibility of the devolved administration which must play its’ part alongside the Spring Statement.”
“Following extensive lobbying from the CLA and other business groups, the UK Chancellor of the Exchequer, Mr Rishi Sunak announced that the 5% reduced VAT rate on the installation of energy saving materials will be subject to zero rate VAT until 31 March 2027. This will include the latest technology in sustainable energy generation in residential properties. This will be hugely beneficial to people looking to decarbonise their homes.”
At a time when Welsh rural businesses are still recovering from the impact of the pandemic restrictions, the Welsh Government must act now to reduce the impact of the dramatic increase in energy and raw material costs. We call on the Welsh Government to support green investment into the economy to create and secure long-term, well-paid jobs
“The Welsh Government should rethink its unrealistic proposals to introduce a tax on tourism and penalise the self-catering holiday-lets sector, focus its attention to solutions in improving the planning system to fulfil its ambitions to build affordable homes. It’s vital that Welsh tourism be competitive following what the tourist sector’s called the three-year winter. This may support the Wales rural tourism sector as the UK Government has not extended the current 12.5% VAT rate for hospitality past the 1st April.”
“The Chancellor’s Spring Statement had some positive elements, including the increase in the threshold for National Insurance and a reduction in VAT on energy-saving technologies in homes. However, there was insufficient support for the rural economy and hospitality businesses. The failure to keep VAT at 12.5% for hospitality businesses will have a sizable impact on profitability at an already testing time for many. This is a blow for rural businesses that are under pressure to diversify, and the reduction in business rates will not plug this gap. If Government is serious about supporting the countryside, it must create the environment for rural businesses to thrive.”