Minister accused of ‘passing the buck’ on private schools cash
After high streets shed up to 50,000 jobs in six months...
FINANCE secretary Derek Mackay has been accused of ‘passing the buck’ after telling private schools they should apply for council rates relief following a £5million SNP tax raid.
Mr Mackay plans to rake in the cash by stripping independent schools of the right to use charitable status to claim business rates relief.
But opposition politicians accused him of causing ‘total confusion’ by advising schools to try to claw some of that money back from councils.
The minister also said it will be up to local authorities to decide whether or not to pass on relief, which means some schools will get it while others do not.
Schools warned this means many of them will have to hike fees, while others said bursaries and paid-for-places will be slashed due to a lack of funds.
Yesterday it emerged Mr Mackay gave the advice to one of Scotland’s top boarding schools, Kilgraston in Perthshire, after being contacted by Education Secretary John Swinney over the matter.
Scottish Conservative education spokesman Liz Smith said: ‘There now appears to be total confusion in the SNP ranks about the party’s proposal to end business rates relief for independent schools.
‘On the one hand Derek Mackay claims the Scottish Government will use legislation to end business rates relief for independent schools. But when pressed by colleagues, he says it will be up to councils to decide whether or not to apply the policy.
‘In other words, some councils might choose to end business rates relief but others would not. Such a situation would be seen to be highly divisive.’
Kilgraston governor Steuart Fotheringham contacted Mr Swinney, who is his MSP, over the matter. Mr Mackay then said the school should apply to Perth and Kinross Council for rates relief.
In a letter, the Finance Secretary said he was sure Mr Swinney would want to ‘keep a close eye’ on the issue. He added: ‘There would be merit in informing Mr Fotheringham that when developing business rate reliefs I am fully aware national incentives are not always nuanced enough to fully flex to the needs of every sector.
‘That is precisely why in 2014 I created a power to allow councils the ability to offer bespoke local business rate relief schemes.’
Experts have warned the move will put private schools in Scotland at a ‘competitive disadvantage’ to the rest of the UK.
Labour education spokesman Iain Gray said: ‘People will be bemused that John Swinney, the finance secretary who hammered budgets for local schools, is now lobbying for tax breaks for private schools as education secretary.
‘Local councils have seen £1.5billion of cuts under the SNP government – they need help to fund local schools properly, not for the Government to suggest they fund tax breaks for private schools.
‘The hypocrisy of this will anger parents and teachers.
‘This looks like another error of judgment form John Swinney, who was supposed to be a safe pair of hands at education but has repeatedly dropped the ball.’
A Scottish Government spokesman said: ‘We are certainly not passing the buck to local authorities and have in fact given them greater power over rates reliefs to allow flexibility to local needs.
‘We accepted the Barclay review recommendation that reduced or zero rate bills relief for independent schools was unfair on state schools and should be removed.’
‘Situation would be highly divisive’
THE crisis facing our high streets was laid bare yesterday with figures showing that nearly £1 in every £5 spent is now online. As troubled Debenhams announced further job cuts, the Office for National Statistics revealed internet spending is at a record high.
Experts warned that further store closures and job losses were on the way as shopkeepers struggled to compete with an onslaught from web-based rivals such as Amazon.
Overall, 50,000 retail jobs have been axed since the start of this year, with 60,000 stores closing since 2013. The crisis has been highlighted by the Mail’s Save Our High Streets campaign.
Laith Khalaf, senior analyst at savings and investments firm Hargreaves Lansdown, said the high street was facing a double whammy from web shopping.
‘Even if more traditional stores are switching to the online channel, that means they need less physical space to sell stuff from,’ he said.
‘That spells more store closures, which clearly does nothing to attract people to the high street and is likely to contribute to declining footfall.’
Figures from the ONS reveal that online spending shows no sign of slowing down. It accounted for a record 18.2 per cent of retail spending in July – up from 10 per cent five years ago and 5 per cent a decade ago.
Internet-only retailers such as Amazon, Asos, Ocado and Shop Direct dominated the proportion of online sales, making up 51.2 per cent of all purchases.
But there are signs that traditional retailers are fighting back by doing more business online.
Struggling department stores now make one in five sales online – a rise of more than a third in just a year. Mr Khalaf said: ‘There’s really only one winner in the battle between clicks and bricks at the moment, with online sales driving retail growth onwards and upwards.
‘Even the dusty old department stores are belatedly getting in on the act.’
Retailers have blamed soaring tax rates for crippling their businesses as online-only retailers such as Amazon pay significantly lower bills for their out of town warehouses.
Bosses of Britain’s much-loved brands, including John Lewis and Marks & Spencer, have come out in support of the high street campaign launched by the Daily Mail. It calls for a fair tax on internet retailers and reforms of business rates.
Rachel Lund, of the British Retail Consortium, said the figures demonstrated the need for urgent government action.
Last week Chancellor Philip Hammond hinted at an ‘Amazon tax’ on web retailers in an attempt to level the playing field. He is also under pressure to freeze business rates amid warnings that the high street faces another crippling tax hike next year.
If the consumer prices index rate of inflation stays at its current rate of 2.5 per cent next month, the retail sector in England will see their rates bill jump by £194million next year, according to industry experts Altus Group. It said freezing rates would give the high street an ‘unprecedented’ stimulus.
Debenhams is preparing to sack almost 100 staff members after having laid off more than 300 employees so far this year in a bid to cut back on costs.
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