Page last updated at 17:37 GMT, Thursday, 29 November 2012

Enterprise and Business Committee

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The chair of the Business Rates Task and Finish Group told AMs that the Welsh Local Government Association (WLGA) is looking at instances of possible fraud that involve charities taking on the lease of empty properties so that the landlords benefited from the lower business rates.

Prof Brian Morgan of Cardiff Metropolitan University explained on 29 November 2012 that the WLGA is looking at instances of charity shops taking over empty properties then occupying only about 2% of the space.

The business rate relief for charity shops is currently 80%, while empty properties are charged the full rate after three months of being empty.

The Business Rates Task and Finish Group was set up in autumn of 2011 in order to ascertain how the business rate system could be utilised in Wales to encourage development and economic growth.

Professor Morgan said that the group's report, released in June 2012, recommended allowing local authorities to keep 50% of any extra revenue raised from changing business rates.

Business and Enterprise Minister Edwina Hart was also present to give evidence to the committee on business rates.

She said that people didn't understand business rates: "We've been quite flabbergasted about lack of understanding of how business rates work."

Business rates are not currently fully devolved but the Silk Commission's first report published on 19 November 2012 recommended that they should be.

Ms Hart said that she supported devolving business rates and that she "couldn't see any adverse effects" to Wales that could result from doing so.

The committee also discussed enterprise zones and city regions.

The Welsh government defines enterprise zones as "designated areas where specific incentives are offered to attract new businesses and industry to that prime location".

There are seven enterprise zones across Wales, each focusing on a key target sector.

They are designed to help develop sustainable growth, create jobs and improve the competitiveness of the Welsh economy.

Ms Hart told the committee that enterprise zones "are about creating job opportunities"

Committee Chair Nick Ramsay AM questioned Ms Hart on city regions asking if she was worried that some businesses would see them as a threat to their independence.

"Will some people see these as city empires rather than city regions?" he asked.

Ms Hart dismissed his concerns by saying that city regions aren't about governance but about boosting the economy.

Enterprise and Business Committee

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