Finance Secretary Derek Mackay will make a massive U-turn today over proposed increases to business rates – with specific aid for the hospitality industry.
Mr Mackay will make a statement to parliament, where he is expected to propose a cap on rates rises on the pressured hospitality industry across Scotland.
It is also understood there will be “specific measures” for the north-east included in the statement.
But last night, opposition councillors criticised the SNP for taking so long to act and claimed Mr Mackay was being “dragged to parliament kicking and screaming” to discuss the crisis.
Furious business owners have spoken out about the soaring bills, as the rates are based on 2015 values before the full effect of the oil downturn hit.
The Scottish Government has so far insisted their rates review means half of all businesses will pay no rates – with others paying less than they currently do.
But some firms are facing as much as 250% increase, with many warning they will have to sack staff or even close entirely.
And last night, it emerged that cash-strapped Moray Council will have to pay out an extra £225,000 every year in business rates under the proposed increases.
The local authority has warned residents that crucial services previously thought “untouchable” will have to be slashed as it struggles to save millions over the coming year.
The annual cost for Elgin Library will go up from £80,000 to £94,000, while charges for St Peter’s Primary School in Buckie will spiral from £6,675 to £13,500 and the levy for the Forres House
Community Centre will rise from £50,000 to £63,000.
Traders in the region have slammed the proposed increases, warning the area could become overrun with abandoned pubs and hotels.
The Cullen Bay Hotel has already put its £200,000 expansion project on hold as it faces an £11,000 increase, while the manager of Lossiemouth’s Beach Bar said he may be bankrupt “by Christmas” if his bill goes from £13,500 to £42,000.
Last night Mr Mackay said: “I have set out a competitive package of measures to give small and medium enterprises the security and confidence to grow in these tough economic times.
“Under the small business bonus scheme 100,000 properties will pay no rates at all next year and a further 3,500 properties will benefit from 25% relief. This package means around 9,000 properties will be up to £7,000 a year better off than their equivalents in England.
“Additionally we are cutting the tax rate that applies to a property’s rateable value by 3.7% to 46.6p in the pound so even some properties with values going up will see their bills go down. And to help larger firms we have increased the threshold for the large business supplement, meaning that 8,000 fewer premises will pay it.
“These actions are worth £155million, with an overall package of reliefs worth £600million, mean seven out of 10 business premises in Scotland will pay either the same rates or less next year – with more than half paying nothing at all.
“Before the new property values came out I took action to support business. Since then I have been listening to firms across Scotland and today I will set out further steps to support Scotland’s economy.”
Conservative shadow finance secretary Murdo Fraser said: “Derek Mackay was warned months ago about the damage that these rates increases could cause, but it’s taken until now for him to do anything about it.
“He’s been dragged to parliament kicking and screaming after we forced him into discussing the issue with an urgent question.
“It was clear that a crisis was emerging but instead of acting the SNP sat back and tried to pretend that it had nothing to do with them.
“Businesses weren’t buying it, and they’ll now want reassurances that the SNP will take urgent action to redress this situation.
“They need real help from the Scottish Government, not just a passing of the buck to councils that have already had their funding cut by the SNP.
“If they don’t take meaningful action we face seeing the Scottish economy suffering as many businesses across Scotland will be left with no choice but to close.”
