Ministers are “very keen” to extend business rates relief in Scotland but any decision would be subject to an equivalent policy in England freeing up extra cash, the finance secretary has said.
Kate Forbes told MSPs any deal to relieve pressure on struggling businesses would be contingent on the UK Government announcing similar plans south of the border because it would not be “affordable” under the Scottish Government’s current budget.
Business leaders in the north-east revealed on Tuesday plans to pursue a region-specific rates deal, to countenance out-of-date valuations in Aberdeen and Aberdeenshire, after Holyrood voted to delay a revaluation of business rates by an extra year to 2023.
Existing rates are based on valuations completed in 2015, before the oil and gas downturn, and transitional relief set up to mitigate the disparity between rateable and real values is to expire at the end of this financial year.
The finance secretary was asked during a Budget update to the Parliament on Wednesday whether she would consider extending the relief for a further year.
Rates relief is within the SNP’s gift to fix now.”
North East MSP Liam Kerr
Ms Forbes said: “I’ve been very clear publicly that, in terms of next year’s budget, I am very keen to extend some form of rates relief but that it’s subject to an equivalent policy in England that then generates consequential funding because it isn’t affordable within the Scottish Government’s fixed budget to do that.
“So our desire is to urgently set out a plan to support businesses through non-domestic rates but it does require early notice from the UK Government of what their intentions are.”
During a separate question from Aberdeen Donside MSP Mark McDonald, the finance secretary appeared to suggest Aberdeen City Council should use discretionary cash set aside for the Covid-19 pandemic to mitigate the “particular challenges” in the city.
After being asked whether she would look at “local flexibility around rateable values” to ensure businesses in Aberdeen are not left behind, Ms Forbes said it is a “very important point, that local economies differ across the country.”
“That’s why the discretionary funding is so important, that central government will try to target support at the sectors that are hardest hit,” she said.
“But it’s important that local authorities have the ability to tailor their own schemes in response to the economic conditions and that’s why, well, I hope Aberdeen City Council will be able to use the discretionary funding for the particular challenges in Aberdeen.”
‘Yet more money from the Treasury’
Scottish Conservative North East MSP Liam Kerr hit out at the comments and said it is already within the Scottish Government’s power to solve the issue.
He said: “For years now, we have been asking for a fair deal on business rates for the north-east. The SNP and Greens voted against us to delay the next revaluation.
“Rather than produce something positive for councils, Ms Forbes is looking for yet more money from the Treasury. That’s the same Treasury that sent £8.2 billion extra to help Scotland fight Covid, with another £1.3bn to bolster next year’s budget.
“Rates relief is within the SNP’s gift to fix now.”
A Treasury spokesman said: “We have provided an extensive package to support Scottish businesses since the start of this crisis, including the furlough scheme currently protecting more than 123,000 Scottish jobs, nearly 80,000 government-backed loans worth over £2.8 billion, tax deferrals and eviction protection.
“We are also providing £2.4 billion of additional funding to the Scottish Government in 2021-22, which can be allocated in whatever way it decides.”