Statement from The Plaid Cymru Party

The Welsh economy is dominated by SMEs - with some claiming that in Wales the initials should stand for 'Small and Micro Enterprises'! There are 150,000 SMEs in Wales, and over 60% of all jobs are provided by businesses employing less than 4 people. If every business could take on a single employee the persistent unemployment problem would be solved at a stroke.

Unfortunately the net rate of business formation is one of the lowest among the regions of Britain, and even when SMEs survive they tend to remain small. So Plaid Cymru the Party of Wales put special emphasis on increasing the rate of business formation and encouraging existing SMEs to expand. We pursue these aims both in the National Assembly for Wales - where Plaid successfully proposed the formation of Finance Wales - and in Westminster where three of our policy aims must be pursued

1. Lower Business Rates
Undoubtedly the most important thing is to reduce the financial burden on small businesses. Business rates are not only heavy - they are fundamentally unfair. The Labour/Lib.Dem. coalition in Wales have gone some way to easing this by giving transitional rate relief to businesses with a turnover below a fixed level but this is tinkering with the problem - and it means extra punishment for companies, such as small hotels, just over the limit. Plaid Cymru believe all taxation should be based on ability to pay. For individuals we advocate local income tax to replace Council Tax, and similarly we will press for business rates to be based on turnover and profit. This would ensure that large companies such as the big supermarkets carry a fair share of the burden.

2. Cuts in Employers' National Insurance Contribution and Corporation Tax.
NI contributions are a payroll tax that discourages companies from taking on extra employees. This is especially unfortunate in those areas where average income is so low they qualify for Objective One - the highest level of European Aid. In Objective One areas Europe will allow a cut in the NI rate and Plaid MPs will seek the help of MPs from English Objective One areas to press the Chancellor on this. Similarly in Objective One areas Europe will allow a cut in Corporation Tax to encourage successful firms. Plaid Cymru advocates the progressive reduction in the rates of corporation tax from 30% and 20% to 20% and 10% respectively.

3. A Stable, Competitive Pound
Labour claims it is delivering a prosperous economy. This is true in South England with a dependence on services, especially financial services. Unfortunately it is not true in regions heavily dependent on manufacturing industry where the over-valued pound has sucked in imports and made it much harder to export. There has been a sharp decline in the number of manufacturing jobs and this has a knock-on effect on local service-providers such as shop-keepers, hotel owners, local tradesmen. Plaid Cymru will step up pressure to restore the pound to a stable, competitive value. The guidelines for the Bank of England must be changed to include targets for employment and overall GDP as well as for inflation. And finally, in or out (and we advocate "in") we cannot tolerate any longer the uncertainty over entry to the Euro. Phil Williams Economic Spokesperson for Plaid Cymru the Party of Wales