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Business leaders launch legal bid against rates rises

Stewart Spence at the Marcliffe Hotel
Stewart Spence at the Marcliffe Hotel

A group of north-east industry leaders has launched a legal bid to fight “potentially crippling” business rates.

Top Aberdeen solicitor Frank Lefevre has been hired to explore whether legal grounds exist for taking court action against the Scottish Government over the business rates crisis.

Those behind the challenge are understood to be chiefs from across a wide range of industries including oil and gas, development, entertainment and retail.

Last night Mr Lefevre said he was going to be working alongside QCs to assess whether there were any legal grounds to challenge the “competency” of the current rates review.

He said: “A number of Aberdeen businessmen have consulted me with the purpose of seeking best advice as to the possibility of effectively challenging the current business rates review and all related matters.

“Their intention is to pursue the matter by way of appropriate court action if there are legal grounds for doing so.

“In the first instance it is necessary to engage the services of suitable Queen’s Counsel to advise on the competency relevance and prospects of success in pursuing the intended course.

“That is receiving immediate attention as time is short.”

From April 1, businesses across Scotland will have to pay revised rates, however firms are eligible to appeal from then until September.

The Press and Journal has campaigned against the move, which will leave some firms facing increases of as much as 200%.

Many have branded the revaluations unfair as they are based on surveys carried out in 2015 before the oil slump took hold of the economy.

Last night, business chiefs voiced support for the legal challenge which they hope will “ease the burden” of these “potentially crippling” new costs.

Hotelier Stewart Spence, owner of the five-star Marcliffe Hotel, in Aberdeen, said it was important for companies to work together to ensure Finance Secretary Derek Mackay understood the position that city businesses were in.

He said: “I have said from the very beginning that the only way to challenge this was to do it together.

“We all must be reading from the same book.

“The situation Aberdeen is in is not short-term – this is the way it is going to be for the future.

“Even with a pick-up, we are talking 15-20% less compared to where we were before.

“I have been here all my life and I lived through the recessions of 86 and 98, but this is permanent.

“We have to work together to make the Finance Secretary see the situation we have here in Aberdeen.”

Andrew Martin, vice chair of the Aberdeen City and Shire Hotel Association said city hoteliers were “frightened” by the prospect of the rates increases.

He said: “We want to see businesses being able to employ more people and give more income to the region but by taking more money out of these businesses you are not making them sustainable.

“A lot of operators and owners are very frightened by that.

“There is no doubt that hotel businesses across Aberdeenshire cannot fund this.

“Not only has demand for hotel rooms collapsed but there has been an increase in supply, with a lot more new entrants coming into the hotel market as well.

“These new rates will be potentially crippling.

“I hope there is some way round this – something that will ease the burden.

“If the changes are brought forward then people will go out of business – there is no question of that. It is the worst thing for the region.

“If these rates come to pass, and I hope they don’t, we will lose good hotels and employment in these hotels and we will lose income to the region.

“To me, it is economically so shortsighted.”

Aberdeen City Council finance convener Willie Young said it was “little wonder” businesses were thinking about taking legal action against the Scottish Government.

He added: “Aberdeen is the lowest funded council in Scotland yet businesses in Aberdeen pay the highest non domestic rates in Scotland.

“Businesses require assistance from the Scottish Government given the situation has significantly changed in Aberdeen since 2015 when the revaluation was taken.

“The whole process appears to be flawed and if Derek Mackay listens to businesses in Aberdeen and provides the necessary relief business are asking for, there will be no need for a judicial review.”

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