Moves to hand business rates to Scottish councils slammed

Business leaders in Scotland have warned firms could be treated as ‘cash cows’ after MSPs moved to give councils control over business rates.

Members of the Scottish local government committee backed an amendment earlier this week to the Non-Domestic Rates (Scotland) Bill that could see councils take full control of the Scottish rates system and may end Scotland-wide small business and charitable rate relief.

It remains to be seen if the amendment will survive further discussion and a fresh vote in the Scottish Parliament itself, but the move was swiftly condemned by the Scottish Retail Consortium and the Federation of Small Businesses (FSB).

‘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,’ said Scottish Retail Consortium director, David Lonsdale.

‘Councils are already able to reduce business rates in their area, but only three have ever bothered to do so. Handing councils control over the poundage rate could lead to firms being treated like cash cows, pushing business rates up even higher and further hitting competitiveness.’

The FSB’s external affairs manager for Scotland, Stuart McKinnon added: ‘Across Scotland, small businesses will be alarmed to hear that nationwide rate relief for smaller operators is under threat.

‘This Bill is supposed to be looking at new ways to make the rates system more user-friendly and introduce more frequent revaluations.

‘Instead, we see a policy adopted which could costs businesses far more than the tourism tax or the workplace parking levy. At the earliest opportunity parliamentarians must put this significant Bill back on track.’

The chief executive of UKHospitality, Kate Nicholls said she urged ‘everyone involved’ to overturn the amendment.

‘Business rates are already a scourge for High Street businesses across Scotland, directly leading to business closures and the erosion of local communities. Hospitality is the hardest hit sector and any increases will hit Scotland’s pubs, hotels and restaurants the hardest,’ said Ms Nicholls.

‘Devolving powers to local authorities, who are desperate for any extra tax revenue, is wrong-headed and will inevitably lead to higher costs for local businesses.

‘The intention of the Barclay Review was to make the system fairer and more consistent. This amendment flies in the face of those objectives. Scottish Parliamentarians should be looking at ways to support business as a creator of jobs through cutting punitive business rates, rather than saddling them with even more cost and complexity.’

Photo Credit – Tama66 (Pixabay)