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Ross Thomson: Business rates U-turn is welcome relief for north-east… But firms still lack certainty

Ross Thomson
Ross Thomson

It is well over a month since the Press and Journal started to report on the enormous increases in business rates bills and the potentially devastating impact the rises could have on the local economy.

The paper deserves credit for shining a spotlight on this issue and for keeping it in the public domain.

My colleagues and I on the Scottish Conservative benches have also been consistent in our support for local businesses that were crying out for help.

Led by Ruth Davidson, we made sure that the issue was at the forefront of political debate at Holyrood, providing the type of strong opposition that we said we would deliver prior to last May’s election.

The SNP, on the other hand, simply tried to pass the buck.

From the outset, we were told that the government would not intervene as this was a matter for the assessor and for local councils to deal with.

To give credit to Derek Mackay, he did come to Aberdeen to hear for himself the very real concerns of local businesses, but his response was poor.

The attempt to dress up “extra” funding for all Scottish councils as income that could be used to mitigate against business rates rises fooled no-one in the north-east business community.

Finance Secretary Derek Mackay
Finance Secretary Derek Mackay

Aside from the fact that every council in Scotland received a top-up and only Aberdeen City and Aberdeenshire were expected to spend the income on rates relief, Mr Mackay and the SNP declined to mention that the overall budgets for all local authorities were still being cut.

A smaller cut is still a cut, and our councils were in no shape to deal with this problem, as we pointed out at the time.

Now, only after the criticism of his government hit the national press and he faced calls from the Scottish Conservatives to make a statement to parliament, have we seen action.

It is an embarrassing U-turn for the Cabinet Secretary and follows hot on the heels of the reversal of the ill-thought plan to raid north-east council budgets and send the income to the Central Belt.

A 12.5% cap will be welcomed by the hospitality sector and will make a difference to the hefty bills levied on office premises in the north-east.

Ruth Davidson has attacked the SNP over the rates proposals
Ruth Davidson has attacked the SNP over the rates proposals

However, based on the Scottish Government figures, it appears there will still be about 8,000 businesses in the region that will not benefit from these changes. Furthermore, the cap will only be in place for one year when businesses say they need certainty over three years.

Our woefully underfunded councils will still have to do much of the heavy lifting in terms of what will still be a very substantial local tax burden.

The Scottish Chambers of Commerce hit the nail on the head by saying that this won’t deal with the root of the problem.

Businesses will expect a re-examination of the whole business rates system and the way in which the rates are calculated.

The Scottish Conservatives recognised this prior to last May’s election and put forward plans in our manifesto for a business rates freeze.

We were also quick to pick up on the concerns of local businesses here in the north-east when the extent of the rates rises became clear.

Our MSPs here in the north-east and our leadership in Edinburgh will continue to stand up for this area.

I think there is strong evidence that we are doing exactly what we said we would do – provide that strong opposition and hold the SNP to account.

I can promise that we will continue to do so.

 

Ross Thomson, Scottish Conservative MSP for the North East Region.