Relief call

Arthur insists business rates support is ‘generous’

Tom Arthur: relief has to be affordable

Public finance minister Tom Arthur today insisted the Scottish government was offering generous support to help companies cope with business rates.

Following calls from businesses and lobby groups, Mr Arthur came under new pressure in parliament to match relief schemes in England.

He told MSPs that most of the 30 recommendations in a review by former banker Ken Barclay – commissioned in 2016 and published in August 2017 – were accepted and implemented by the government.

These included relief schemes that ministers say are either exclusive to Scotland or the most generous in the UK.

Conservative finance spokeswoman Liz Smith said parity with England on the large business supplement, or higher property rate, was promised in 2021 but has still not been secured, “adding to what the Scottish Retail Consortium has described as damaging perceptions about Scotland’s lack of competitiveness”.

She also pointed out that all 30 recommendations in the Barclay review were aimed at improving the economic climate in Scotland.

“Does the minister now accept that retail, hospitality and leisure industries have already been put at significant disadvantage because the Scottish government would not commit in the recent budget to a 75% rates relief which is available in England?”

Mr Arthur said that with regard to the higher property rate the government is operating in a “demanding set of fiscal circumstances. However, we are committed to reducing the higher property rate when affordable and finances allow.”

With regard to small businesses, he said about 50% of hospitality and retail premises are not paying any rates, which was one of the “most generous” relief schemes of its type.

Allocating resource to additional business rates relief would mean taking revenue from other budgets, he said.

Labour’s Daniel Johnson said many small businesses complain about being at a competitive disadvantage to England.

Mr Arthur replied: “We take a range of factors into consideration during the budget process. We do provide the most generous social contract anywhere in the UK that is made possible because of our progressive approach to taxation.”

However, he said that where opposition members would like to see changes to income tax or non-domestic rates “we are open to these discussions”.

He pointed out that if they wanted to see additional spending, they should also identify corresponding areas where budgets would be cut to meet that commitment.

Business reaction

Businesses reacted with disappointment to the minister’s statement and “the apparent rescinding of the timetable for restoring parity with England on the Higher Property Rate”

The Scottish Retail Consortium says this is a surtax which costs Scots firms £60 million annually,.

David Lonsdale, director of the SRC, said: “This apparent retraction of the timetabled commitment to restore the level playing field with England on the Higher Property Rate surtax is incredibly frustrating and troubling, more so given lingering concerns about Scotland’s relative economic underperformance compared to the UK as a whole and the pressing need to lift private sector investment.

“With Scottish Ministers having already ignored the recommendation of their own Barclay Review to end this Scotland-only surcharge by 2020, it’s dispiriting they won’t even commit to remove this before this Parliament ends despite it being a manifesto commitment.  

“There is no credible justification why firms operating from 11,000 premises in Scotland are apparently thought to better placed to be forking out more in rates than firms in comparable premises in England. 

“The surcharge only serves to make life tougher for those retailers affected by making it more expensive to maintain a shop presence on Scotland’s high streets. Ministers need to rethink their stance and urgently pursue a much more ambitious approach towards restoring the level playing field with England on the higher property rate.”

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