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Opposition urged to back track

SNP hits out at ‘reckless’ bid to scrap business rates relief

Derek Mackay

Concerned: Derek Mackay (pic: Terry Murden)

The Scottish Government has criticised a ‘reckless’ attempt by opposition parties to end the rates reliefs scheme, claiming it will ‘devastate’ businesses.

Scrapping the current scheme, which benefits 100,000 businesses throughout Scotland, will also put local services at risk, according to the SNP.

Conservative and Labour MSPs have voted for an amendment to the Non-Domestic Rates Bill proposed by Andy Wightman of the Green Party that would remove the ability of Scottish Ministers to set the business rates poundage.

Amendment 9, lodged by Mr Wightman, sets out to devolve powers to set business rates to councils. The effect is that rates would no longer be set nationally and business rates reliefs, like the Small Business Bonus and the Business Growth Accelerator, would automatically end.

Responding to the move, Finance Secretary Derek Mackay said: “Scottish businesses need an escape from Brexit – not yet more uncertainty and unnecessary cost. The Scottish Government offers the most generous package of business rates reliefs anywhere in the UK, worth nearly £750m to Scottish business.

“Astonishingly, Tory and Labour MSPs have voted to withdraw nearly £300m of relief in a move that would devastate Scottish business.

“More than 100,000 businesses benefit from the Scottish Government’s Small Business Bonus and the Business Growth Accelerator ensures that businesses that build new premises or enhance existing ones pay no more for the first year. Both of these would disappear under the proposals being forced through by opposition parties.

“A majority of Scottish businesses benefit from the lowest poundage anywhere in the UK and incentives that only exist in Scotland. All that is under threat as ministers would not be able to set a consistent rate and provide national reliefs.

“These plans would deliver a body blow to Scottish business and would put at risk the delivery of local services. The Tories and Labour must back track on this disastrous move at the final stage of the bill.

“The opposition’s economic credibility was already in tatters, but this is just reckless. This makes crystal clear that the SNP is the only party that will stand up for Scottish business.”

Rates reliefs are worth hundreds of millions of pounds annually to Scottish business.

The Federation of Small Businesses, CBI Scotland and the Scottish Retail Consortium have all raised concerns over the impact of the proposed changes, warning it will create added costs and deter investment.

Stuart Mackinnon, FSB’s external affairs manager for Scotland, said: “Across Scotland, small businesses will be alarmed to hear that nationwide rate relief for smaller operators is under threat.”

Director of CBI Scotland, Tracy Black added: “Businesses have been clear that we wanted simplification – instead we could face more complexity and fragmentation. And complexity and fragmentation equals a bigger administrative burden and increased business costs.”

David Lonsdale, Director of the Scottish Retail Consortium, commented: “Allowing each of Scotland’s 32 councils to set the poundage rate in their area is an alarming and retrograde step, and flies in the face of the Bill’s aims and the thrust of the rates reform agenda.”

The SNP said that under current arrangements the Scottish Government guarantees council NDR income, protecting them from economic shocks, but that this would not be possible to continue if NDR is devolved to 32 local authorities.

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