We were misled over rates rises, say angry hospitality sector chiefs

SNP ministers have been accused of misleading business owners, with the hospitality sector set to face a higher cap on rates than was promised only six weeks ago.

Finance Secretary Derek Mackay was forced into a U-turn on soaring business rates in February after a backlash from firms. Pubs, restaurants, cafes, hotels and nightclubs had faced rises of up to 400 per cent.

Amid the row, he announced a 12.5 per cent cap on rises for those in the hospitality sector for a year. Now it has been revealed that due to inflation, business owners will see bills rise 14.75 per cent before they are capped.

Company bosses reacted with fury last night, claiming the Scottish Government has gone back on its promise.

Yesterday, it rushed out a letter warning businesses of the inflationary cap after being contacted by the Daily Mail.

Business owners said the rise in the cap and the ‘application’ based relief system are not what Mr Mackay set out. Ryan James, chairman of Glasgow Restaurant Association, said: ‘Derek Mackay said the cap was 12.5 per cent, he did not mention inflation. He should stand by his word.’

With the first direct debits to be taken on April 16, he added: ‘People will rightly feel angry at this and misled. It’s an absolute outrage and there will be people who will cancel their direct debits.’

Yesterday, a Scottish Government spokesman said: ‘We have been clear from the outset that it was a 12.5 per cent realterms cap, which equates to a 14.75 per cent cash increase.’

But the official record of Mr Mackay’s announcement and subsequent discussions of the relief show no mention of the higher cap.

Instead, Holyrood’s report states that Mr Mackay said: ‘I confirm today that we will now offer a new national relief that caps increases for hotels at 12.5 per cent.’

He added: ‘No restaurant, pub, hotel or cafe will see their rates bill increase by more than 12.5 per cent on April 1.’