Scottish Tory leader Ruth Davidson has called for “meaningful action” from the SNP government to help north-east firms hit by massive increases in business rates.
According to the Scottish Government, 100,000 smaller firms across the country will be taken out of the rates system entirely as a result of changes being introduced this spring.
But companies from the hospitality, engineering, oil services and retail sectors in and around Aberdeen are on the warpath over enormous rises in their rates bills after a revaluation.
Finance Minister Derek Mackay will travel north to discuss the crisis with Aberdeen and Grampian Chamber of Commerce (AGCC) on Friday.
Yesterday, Ms Davidson said a temporary solution was needed to ease pressure on a local economy already struggling amid the oil and gas industry downturn.
She added: “We welcome this visit to the north-east from the finance secretary to hear for himself the devastating impact that these punitive business rates rises could have.
“However, it is important that the minister does not simply pay lip service to the business community and instead takes meaningful action to address their concerns.”
Her latest intervention in a growing storm over rate rises came as a leading expert criticised the Scottish Government for its “party line” response.
Eric Shearer, an Aberdeen-based partner at property firm Knight Frank, said 10-15% more firms in and around the Granite City – not fewer – were likely to be paying rates after the threshold for 100% relief increases.
A Scottish Government spokesman said: “Rating valuation of business properties is undertaken by independent assessors, funded by local councils – not the Scottish Government.
“It is for councils to apply rates reductions, on top of existing statutory reliefs, as they see fit.
“Individual business ratepayers can appeal their valuation via independent processes if they feel it is incorrect.”
The spokesman added: “The Small Business Bonus Scheme, which has already saved businesses more than £1billion, will be expanded from April to lift 100,000 properties out of rates completely.
“Meanwhile, 8,000 business properties will no longer pay the large business supplement, and the overall business rates poundage – the core tax rate that applies to the rateable value of business properties – will also be cut by 3.7% to 46.6p.”
AGCC research and policy director James Bream said: “Agreeing to our urgent meeting request shows that Mr Mackay realises how serious this situation is.
“We’ll be reminding him the Scottish Government has said it wants to support the north-east and the oil and gas industry.
“They have a perfect opportunity to make a real statement of intent and use levers very much in their own hands to confirm support which allows us to mitigate impacts, save hard-pressed businesses and jobs, and retain hopes for growth.”
Commercial premises with a rateable value (RV) of up to £15,000 will be exempt from paying any rates at all from April.
The current threshold for the Scottish Government’s Small Business Bonus Scheme (SBBS) is £10,000.
New RVs coming into force in April are based on an assessment two years ago, when the previously buoyant local commercial property market was just starting to adjust to a slump in oil prices.
According to Mr Shearer, 10-15% more Granite City businesses will be liable for rates as they move above the new SBBS threshold.
He said: “The party line that (finance secretary) Derek Mackay … and others keep repeating in relation to the Aberdeen rates crisis is that 100,000 small businesses will be lifted out of business rates altogether.
“While this may be true of Scotland, it is simply not true of Aberdeen.
“I suspect some £8,000 and £9,000 rateable values may have risen to more than £15,000.”
A wide range of businesses across the north-east will be adversely affected by the changes.
Yesterday, it emerged that three energy service companies – North Sea Contracts, North Sea Compactors and Stena Drilling – operating from premises in Greenbank Crescent, Aberdeen, will see their RVs rise by nearly 60% after April.
North Sea Contracts could not be contacted, Stena failed to respond to a request for comment and the managing director at North Sea Compactors, Simon Mackay, said he was unaware of the rates rise affecting it.
“I’ll be looking into this,” Mr Mackay said, adding most businesses in the region’s currently embattled economy would struggle to absorb a large rise in their rates.
