Finance Secretary Derek Mackay has revealed a raft of changes to the Scottish Government’s plan on business rates.
Among a number of national proposals, Mr Mackay announced a relief package for the hospitality industry that means hotels, pubs, clubs, cafes and restaurants will see increases to rates capped at 12.5%.
He said that he had listened to the concerns of businesses in the north-east and as a result, the cap would also apply to office premises in Aberdeen city as well as Aberdeenshire.
The changes should affect more than 1,000 premises in the Granite City and around 8,500 hospitality-related businesses across Scotland.
Mr Mackay said measures already put in place by the Scottish Government meant seven out of ten business premises would be better or no worse-off after the revaluation, with more than half paying no rates at all.
He added: “I can confirm to the chamber today that we will offer a new national relief that caps increases for hotels at 12.5%.
“Because we recognise that we must maintain fairness between hotels, pubs, cafes and restaurants, this will apply across those businesses too.
“That will benefit around 8,500 premises and provides proportionately more support to the sector in Scotland than is available in the rest of the UK.
“For Aberdeen City and Aberdeenshire, we will also lift the pressure on office premises by again applying a 12.5% cap next year, benefiting more than a further 1,000 premises.”
Mr Mackay also announced that the overall business rates poundage, the core tax rate that applied to the rateable value of business properties will be cut by 3.7% to 46.6p.
The relief measures are in place for the coming financial year, with an ongoing review of the rates ongoing.
The announcement amounts to a major climbdown from the Scottish Government after weeks of pressure and threats of non-payment from struggling business owners in the north-east.
Hundreds of businesses across the region came forward to warn that with some firms potentially facing near-doubled rates, jobs losses and closures seemed inevitable.
Scottish Conservative shadow finance secretary Murdo Fraser said Mr Mackay’s announcement was “typical of a government who falls asleep at the wheel”, while Labour’s Jackie Baillie said she had been left “positively dizzy” by the speed of the u-turn.
Mr Fraser 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.
“We’ve heard on more than one occasion that this budget has been maxed out, yet once again Mr Mackay has been able to find a bit more money down the back of the couch.
“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.”
Former First Minister Alex Salmond, who earlier this week was forced to deny claims of an SNP split over business rates following comments in his official Press and Journal video blog, said Mr Mackay’s plans were a “first class initiative”.
He said: “A first class initiative from Derek Mackay, which shows an imaginative response to a difficult rates situation.
“He has both responded to real concern and helped the hospitality sector across the country and addressed the specific difficulties in the North East of Scotland.
“This additional help will be welcomed by all those with the interest of Scottish business and jobs at heart. It is a very positive move from the Scottish Government.”
