Concern over vote

22 groups oppose switching business rates to councils

David Lonsdale

David Lonsdale: ‘alarming and retrograde step’ (pic: Terry Murden)

Handing control of Scotland’s £2.8 billion business rates to local councils is now opposed by 22 trade associations and industry groups.

They are urging MSPs to retain the uniform business rate amid growing concerns that councils will force up rates to make up for shortfalls in central government funding.

MSPs on Holyrood’s Local Government & Communities Committee last month backed a Green Party amendment at Stage 2 of the Non-Domestic Rates Bill.

It will scrap the uniform business rate in favour of allowing each of the 32 local authorities to set their own business rate, rates reliefs and any extra rates supplements or surcharges.

Submissions to the committee show 22 industry groups and businesses are urging MSPs to retain ministerial control over the business rate.

Business rates are the Scottish Government’s second biggest tax, and the poundage rate is currently at a 20-year high.

Business has also voiced concerns over the lack of any consultation or economic impact assessment prior to the committee’s decision. The final Stage 3 debate and vote is expected next month.

The vote risks undermining the solid progress that has been made

– David Lonsdale

David Lonsdale, director of the Scottish Retail Consortium, said: “A formidable and broad cross-section of Scottish commerce and industry are voicing serious doubts over the wisdom of ripping up the uniform business rate, and the predictability and consistency it brings, and instead handing councils’ control over this £2.8 billion tax. 

“The vote by MSPs is an alarming and retrograde step. It flies in the face of the rates reform agenda of recent years, and risks undermining the solid progress that is being made to make the rates system simpler, more predictable and competitive.

“Firms fear it would take us back to the bad old days when businesses felt treated like vote-less cash cows, pushing rates up even further.

“This year’s inflation-busting council tax rises simply reinforces this view. We hope MSPs take heed and vote to save the uniform business rate at the final, Stage 3 vote next month.”

Those organisations which have made written submissions to the committee include the CBI, FSB, Scottish Retail Consortium, IoD, Scottish Property Federation, Food & Drink Federation, Scottish Tourism Alliance, UKHospitality, Scottish Wholesale Association, Scottish Licensed Trade Association, Scottish Bakers, and Scottish Land & Estates. The Scottish Council for Development and Industry is understood to have added its opposition.

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