Welsh Government to meet Debenhams over business rates wrangle – five further stores set to close

Wrexham.com for people living in or visiting the Wrexham area

This article is old - Published: Thursday, May 7th, 2020

Debenhams has warned that its stores across Wales could close in a row over business rates with the Welsh Government.

However Finance Minister Rebecca Evans has defended the decision not to extend rates relief to to properties with a rateable value of £500,000 and above, saying the lack of a payment holiday for the chain means more micro, small and medium sized companies have had pandemic support.

At the end of April Debenhams warned that its stores in Wales – including Wrexham – could face permanent closure unless the Welsh Government extended business rates relief to properties with a rateable value of £500,000 and above.

The Debenhams store at Eagles Meadow has a rateable value of exactly £500,000.

Debenhams’ chairman Mark Gifford wrote to Finance Minister Rebecca Evans last month saying: “…by electing to take a different approach to that taken elsewhere in the UK, you have made it economically unviable for us to continue trading the majority of our Welsh business.

“You have failed to understand the situation, where Debenhams Retail Limited is in administration and will cease to pay business rates unless it chooses to reopen its stores in Wales. It will be unable to reopen its stores unless you reverse your decision.”

Last night the chain announced it would be shutting a further five stores after failing to reach agreement with its landlords over rent, taking the total to 15 of confirmed closures so far. Currently Wrexham’s store, along with the others in Wales (Cardiff, Swansea, Newport and Llandudno) are among others with uncertain futures.

Yesterday we asked the Minister Rebecca Evans, if there was any flexibility with the Welsh Government’s stance on the rate relief and for an update on the situation with Debenhams.

She said: “Nobody wants businesses such as Debenhams and other large stores to succeed more than I do, because I do recognise the important role that those anchor stores play, and have played traditionally on our high streets here in Wales.

“This is one of the very difficult decisions that I was talking about in my opening remarks.”

“When we looked at what we would do to support businesses with their rate relief, we decided that those large businesses, many of them multinational companies with rateable values over half a million pounds wouldn’t be eligible for Welsh Government to pay their rates for that year.

“But, we would use that funding then to support the Economic Resilience Fund, which is funding which goes into the pockets of micro, small and medium sized enterprises based here in Wales.

“I think that that was a difficult decision, but I think it was the right decision in terms of what we do with our very limited resources here in Wales.

“I understand. Of course I do, the concerns of Debenhams, and I’ll be looking forward to a conversation with them, either later this week or early next week, whenever that’s been being set up to explore what support that they need.”

“Only 200 properties were affected by that decision, many were the large supermarkets for example, which are doing very well in the coronavirus outbreak because people don’t have that choice that they used to have.”

We also asked about the new announcement by Communities Secretary Robert Jenrick MP that the a revaluation of business rates will no longer take place in 2021, “…to help reduce uncertainty for firms affected by the impacts of coronavirus”.

Legislation had been introduced to bring the next revaluation forward by one year from 2022 to 2021.

We asked the Welsh Government Minister if she saw that as a good thing for Wales, and if it would be a helpful move in the bounce back from the affects of the pandemic.

Minister Rebecca Evans said, “Well, we welcomed the bringing forward of the planned revaluation to 2021 because we think that’s important because it does give businesses the most accurate reflection of a rateable value of their property. So it ensures that businesses are paying the correct amount for the property in which they are operating from.

“It’s disappointing but completely understandable given the legislative challenges that UK Government is facing at the moment. Clearly, we will just have to work to a refreshed timetable in due course.”

You can view the full brief here along with the Q&A session: