ALMOST 10,000 businesses across Scotland are to spared crippling rates rises after the SNP Government bowed to pressure and unveiled a £45m package of support.
After initially maintaining he had done enough to help firms through the first rates revaluation since 2010, Derek Mackay belatedly announced a raft of targeted reliefs for next year.
The move followed a campaign by The Herald highlighting the threat to jobs from hikes to bills in 2017-18, with some firms facing closure because of 400 per cent increases.
With the hospitality and licensed trade worst affected, and uproar within the industry, the Finance Secretary said bill rises would be capped at 12.5 per cent next year for hotels, pubs, clubs, restaurants and cafes.
The £40m measure should benefit 8,500 premises across Scotland.
Mr Mackay also announced a 12.5 per cent cap for 1000 offices in Aberdeen and Aberdeenshire, to reflect the downturn caused by the oil price slump, costing another £5m.
Hotels had faced an average increase of 37 per cent, while offices in and around Aberdeen faced increases of 15 to 17 per cent, compared to a national fall in rates of 10 per cent.
There are also new reliefs for renewable and community energy schemes.
The government said the money would be found from a contingency within the rates system, meaning there would be no cuts to council budgets or other public spending.
Mr Mackay told MSPs that £600m of measures already put in place by the SNP meant seven out of ten business premises would be better or no worse-off after revaluation, with over half paying no rates at all.
But he acknowledged: “It has become clear that there are some sectors and regions where the increase in rateable values is out of kilter with the wider picture of the revaluation.”
Although the cap is for a year, government sources said was no plan to return to higher bills.
Ministers are now waiting for the review of business rates led by former RBS chair Ken Barclay to report in July, before further reforms to an increasingly discredited system.
The announcement coincided with reports that Chancellor Philip Hammond is considering extra help for businesses south of the border in next month’s budget, after an outcry over “eye-watering” rates increases as a result of a revaluation there.
The Scottish measures were broadly welcomed by business leaders, but there were also calls for a more extensive overhaul of the rates system to address deep-seated structural problems.
In a joint statement, the Scottish Tourism Alliance, British Hospitality Association and Scottish Licensed Trade Association, which led the fight against the increases, said the changes were “hugely encouraging News” and would give confidence to the tourism industry.
Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said the revaluation had caused “major problems” for many firms, but the tailored additional support was welcome.
Colin Borland, of the Federation of Small Businesses, said: “These sensible measures should provide some comfort for Scotland’s vital tourism and hospitality industries. Targeted help for the economy of the north east will also be welcomed by local firms.”
But Tory finance spokesman Murdo Fraser said the one-year measure was too little, too late.
He said: “For weeks the SNP has been ignoring this issue, claiming it had no control over this process. In the typical style of this SNP government, it fell asleep at the wheel and only woke up when it crashed into the wall. It’s a desperate eleventh-hour move which will do very little to ease concerns within Scotland’s business community, given that it is for one year only.”
Labour MSP Jackie Baillie said she was “positively dizzy with the speed of the U-turn” but welcomed it nonetheless, given the threat to jobs posed by the rate rises.
Jenny Laing, Labour leader of Aberdeen City Council, said: “Derek Mackay has been forced into a humiliating U-turn. Somehow he has conjured up money he said he didn’t have. There is no strategic thought, no clarity and no vision. Just a knee-jerk reaction to public outrage.”
Green MSP Andy Wightman said the last-minute changes by the government added to the case for returning control of rates to councils, who could better respond to local needs.
Source : HeraldScotland