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Business

Business Rates Relief cut ‘spells disaster’ for Welsh hospitality sector

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THE ANNOUNCEMENT was made last year, but this week the reality kicked in.

The Business Rates Relief has been cut in Wales has kicked in and the hoped-for u-turn has not materialised.

The substantial reduction in business rates relief for hospitality firms has stirred significant concern amongst business owners and industry representatives across Wales.

Effective from 1 April 2024, the relief has been cut from 75% to 40%, accompanied by a 5% rise in rates. This decision is part of a broader strategy to redistribute financial resources to support essential services, particularly the health service, amidst ongoing fiscal pressures.

Finance Minister Rebecca Evans has acknowledged the difficulty of these decisions, emphasising the government’s commitment to managing a tight budget in challenging times. However, the reduction in support has sparked fears of financial strain and potential closures within the hospitality sector.

Industry Response

The announcement has been met with dismay by industry leaders, who warn of the competitive disadvantage Welsh businesses will now face. David Chapman, Executive Director of UKHospitality Cymru, highlighted the stark contrast with England, where businesses continue to benefit from the 75% relief. “This disparity will undoubtedly place Welsh businesses at a competitive disadvantage, particularly small businesses that will see their counterparts across the border enjoying frozen rates,” Chapman said.

A typical pub or restaurant in Wales is now expected to pay £6,400 more than one in England, a disparity that could have severe implications for the viability of many establishments.

Budget Cuts and Tourism

The reduction in business rates relief is not the only financial challenge facing the Welsh hospitality and tourism sectors. The Welsh Government’s budget for 2024/25 also includes a £16m cut in funding for tourism, culture, and sport. Given the strategic importance of tourism to Wales’ economy and cultural identity, this decision has been met with criticism. The sector, already facing intense economic challenges, views the cut as a significant setback that could undermine long-term confidence and investment.

Political and Community Reaction

Stephen Crabb MP, pictured here with restaurant owner Dan Mills, has been vocal in his efforts to highlight the challenges facing the hospitality sector, especially in regions like Pembrokeshire that rely heavily on tourism. Crabb has been engaging with local business owners, bringing attention to the sector’s struggles at both the local and national levels. “The upcoming season should be a time of optimism, but the reality is far different due to these financial challenges,” Crabb stated, emphasising the need for greater support to ensure the sector’s competitiveness and sustainability.

The Welsh Conservatives have strongly criticised the Welsh Government’s decision, with Andrew RT Davies MS, the party’s leader, and Tom Giffard MS, Shadow Minister for Tourism, both calling for a reevaluation of the relief cut. They argue that the reduction could be catastrophic for businesses already contending with the post-pandemic economic landscape, urging the government to maintain competitive rates relief.

Calls for Reconsideration

Amid growing concerns, FOR Cardiff, representing businesses within the city, has issued an open letter to the Minister for Finance, urging the Welsh Government to reconsider its approach to business rates relief. The organisation highlights the critical role of high street businesses in the everyday economy and warns of the potential for widespread closures without adequate support. Carolyn Brownell, FOR Cardiff’s Executive Director, called for a more gradual approach to tapering relief, suggesting that some of the government’s capital funds could be redirected to provide targeted support where it’s most needed.

Looking Forward

As the hospitality sector braces for the impact of these financial changes, the debate continues over the best path forward. Industry leaders, political figures, and community representatives are calling for a balanced approach that supports businesses through these challenging times while addressing the fiscal needs of the country.

The coming months will be crucial in determining the long-term effects of these decisions on Wales’ hospitality sector and broader economy.

How many pubs and restaurants will survive?

Business

Holyhead closure: Storm damage could delay reopening until March

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HOLYHEAD port faces an extended closure following significant storm damage, with fears it may not reopen until March. The disruption has caused widespread consequences for trade, travel, and postal services across the Irish Sea.

The Terminal 3 berth, used by Irish Ferries, sustained extensive damage during Storm Darragh earlier this month. Drone footage revealed a ‘dolphin’ platform had fallen into the sea, exacerbating the situation and impacting the adjoining terminal used by Stena Line.

Currently, all sailings are suspended until January 15, though experts warn this date may be overly optimistic. Garrett Bridgeman, managing director of An Post, Ireland’s national postal service, said: “I don’t think January 15 looks like the date. If you look at the level of work that needs to be done and the safety checks required afterwards, February or March seems more realistic.”

Stena Line stated their priority remains resuming operations safely, while the Marine Accident Investigation Branch (MAIB) is conducting an inquiry into the incident. A spokesperson for MAIB confirmed inspectors are reviewing evidence to understand the circumstances that led to the damage.

The Welsh Government has implemented contingency plans, with additional sailings arranged from Wales and the Mersey area despite challenging weather conditions. Welsh Transport Minister Ken Skates said: “This is a challenge we have never faced before, but we’ll continue working with UK and Irish governments to support businesses and travellers.”

Increased pressure on Fishguard and Pembroke ports

Pembroke Port this week (Images: Martin Cavaney)

With Holyhead out of action, Pembrokeshire’s ports—Fishguard and Pembroke Dock—are facing increased pressure to handle additional sailings. Stena Line and Irish Ferries have already announced extra services from these ports to help ease the disruption.

Irish Ferries has confirmed it will launch a new service from Fishguard, while Pembroke Dock is also experiencing heightened activity with extra crossings scheduled. Passengers and freight operators are urged to check ferry company websites for the latest updates.

Cabinet Secretary for Transport and North Wales Ken Skates praised the efforts of ferry operators and local authorities in managing the surge in activity at Pembrokeshire’s ports. “Both Fishguard and Pembroke Dock are playing a crucial role in maintaining the flow of goods and passengers across the Irish Sea during this unprecedented disruption,” he said.

Local authorities and Transport for Wales are working to ensure traffic flows smoothly around these ports, with additional measures in place to minimise congestion and delays.

Meanwhile, the Irish Road Haulage Association (IRHA) has expressed growing frustration with the lack of clear communication from Holyhead Port authorities. IRHA President Ger Hyland said: “We need correct and true information with a definite timeline. The piecemeal updates have been unhelpful.”

Hyland highlighted the financial toll on hauliers, with some operators facing losses of up to €3,000 per vehicle weekly. He urged ferry companies to increase their efforts to ease the crisis and called on the Irish government to explore financial compensation for affected businesses.

The situation has been escalated to UK Prime Minister Keir Starmer, with calls for direct intervention to expedite repairs and alternative arrangements. Minister of State James Lawless, who met with haulage industry leaders, acknowledged the urgent need for clarity and support.

With Pembrokeshire ports now under increased strain, stakeholders are closely monitoring the situation, awaiting updates from Stena Line in mid-January.

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Business

Derelict Cilgerran house to be transformed into cafe

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PLANS by a village shop owner to convert a house “in a state of disrepair” to a café to “improve the variety of community facilities” locally have been given the go-ahead.

Mrs Morris, through agent Harries Planning Design Management, sought permission from Pembrokeshire County Council to convert The Old Post House, High Street, Cilgerran, currently a four-bed dwelling, to a ground floor café, along with a first-floor flat.

The application received five letters of support, saying it would provide local jobs, support the community, promote Welsh and local food, and provide a local community hub, with three letters of objection, raising concerns about parking and traffic, and potential odours from the premises.

A supporting statement, through the agent, said: “The proposed site is currently a dwellinghouse, in current need of modernisations and renovations throughout. The site is under the same ownership as the neighbouring village stores Siop Y Pentre,” saying the proposal “can be read as an extension to the existing Siop Y Pentre”.

“Siop Y Pentre is a thriving local community village shop which acts as a village hub. The shop provides local residents with day-to-day necessities, with a focus on local, sustainable and minimal waste products,” the statement says, adding the dwelling it seeks to convert “is in disrepair and in need of internal works to make suitable for modern living”.

It went on to say: “The proposed café seeks to retain its focus on local and seasonal produce with minimal waste and would provide a welcomed opportunity for socialising, especially during the daytime. The café will also seek to employ local staff retaining a community feel throughout. As such, the principle of the café adjacent to the existing village store is considered acceptable. The site seeks to encourage a sustainable community, with development of an appropriate scale and nature.

“Further to this, the location of the development is within the settlement boundary and seeks to fulfil a need for day-time socialising environments currently lacking within Cilgerran.”

The application was conditionally approved by county planners.

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Business

Ferry Terminal ‘extremely busy’ due to ongoing Holyhead closure

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PEMBROKE DOCK Ferry Terminal has been experiencing significant congestion today as ferry services remain under immense pressure following the closure of Holyhead Port earlier this month.

The disruption, caused by storm damage, has rerouted ferry traffic through Pembrokeshire, leading to long queues and crowded facilities at the terminal.

The Herald can confirm that it has been very busy today with cars, lorries, and foot passengers queuing in large numbers. Staff are working tirelessly to manage the influx, directing vehicles and assisting passengers as they prepare to board the heavily booked ferries.

A spokesperson for the Port of Milford Haven said: “We are working closely with ferry operators and local authorities to ensure traffic flows as smoothly as possible, but the sheer volume of vehicles is causing unavoidable delays.”

Travelers are being urged to arrive early for their sailings and to remain patient as the terminal operates at full capacity.

Both Stena Line and Irish Ferries have increased capacity on their Pembrokeshire routes, deploying larger vessels, including the Stena Adventurer and the MV James Joyce, to handle the surge in demand.

From our position at the terminal, our photographer has captured photos showing long lines of vehicles, groups of foot passengers carrying luggage, and port staff coordinating efforts to ease congestion.

Authorities are advising non-essential travelers to consider rescheduling their journeys where possible and to monitor updates from ferry operators closely.

(Photos: Martin Cavaney/Herald)

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