Tory and Labour MSPs voted for an amendment by Green MSP, Andy Wightman to the Non-Domestic Rates Bill that would remove the ability of Scottish Ministers to set the business rates poundage. The amendment 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 – including the Small Business Bonus and rates relief for nurseries – would automatically end.
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.
SNP MSPs were the only members of the Scottish Parliament’s Local Government Committee to oppose the move.
Commenting, Ms McAlpine says:
“Analysis by the UK Government predicts that Dumfries and Galloway will be one of the worst hit regions under the proposed Tory Brexit. Our businesses need an escape from this – 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 £750 million to Scottish business. Astonishingly Tory and Labour MSPs have voted to withdraw nearly £300 million of relief in a move that would devastate local business.
“More than 100,000 businesses across Scotland – and 6000 in Dumfries and Galloway – benefit from the Scottish Government’s Small Business Bonus. That would disappear, alongside other reliefs affecting including support for nurseries, 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 the region’s businesses 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 oppositions 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.”
Notes to Editors:
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.”
Tracy Black, Director of CBI Scotland, said: “Businesses have been clear that we wanted simplification – instead we could face more complexity and fragmentation. And complexity and fragmentation = 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.”
Tory and Labour members voted for Andy Wightman’s amendment 9.
Clauses 2 and 3 remove the ability for Scottish Ministers to set the poundage rate or national reliefs under secondary legislation.
After section 8, insert—
<Levying of rates
Levying of rates
(1) After section 7 of the 1975 Act insert—
“7ZA Provisions as to setting of non-domestic rates
(1) The Scottish Ministers must by regulations make such provision as they consider appropriate with a view to giving full effect to section 7, as amended by the Non-Domestic Rates (Scotland) Act 2020, by the year 2024.
(2) Regulations under subsection (1) are subject to the affirmative procedure.
(3) If a rating authority does not choose to discharge their power under section 7, the Scottish Minister may, in respect of the financial year following that in which subsection (1) has come into force and each subsequent financial year, prescribe a rate which will be the non-domestic rate to be levied throughout Scotland in respect of that financial year.”.
(2) Section 110 of the Local Government Finance Act 1992 is repealed.
(3) Section 153 of the Local Government etc. (Scotland) Act 1994 is repealed.>