Michelin axed jobs after rates rose by £300k under SNP
A FACTORY facing closure with the catastrophic loss of 850 jobs saw its business rates soar by £300,000 as a result of the SNP’s high tax policies.
Now ministers have admitted they may have to backpedal and offer Dundee’s Michelin plant a rates cut or an injection of taxpayers’ cash in a desperate bid to keep it open.
Michelin announced the closure of the plant earlier this week, with its entire workforce informed they will be out of work in 18 months.
Finance Secretary Derek Mackay has launched an ‘action group’ and promised to hold crisis talks in a bid to save the stricken plant.
However, the Scottish Government is facing questions over the role its high-tax policies have played in the factory’s crisis after it emerged it was hit by a 39 per cent business rates rise.
Ministers say they will now consider a cut, as well as an injection of public cash, as part of their efforts to rescue the factory.
Conservative MSP Bill Bowman, who represents the North East Scotland region, said: ‘The SNP has some extremely serious questions to answer here.
‘It is clearly the case that the SNP’s own policies are making life difficult for firms right across the country, and have added to Michelin’s woes.
‘Workers at the plant won’t only want to hear Derek Mackay’s warm words – they’ll want an explanation in due course about the SNP Government’s role in Michelin’s closure decision.’
Michelin has been hit by the SNP doubling its ‘large business supplement’, as well as the controversial revaluation of business rates which left thousands of firms facing big increases.
This year, the factory – valued at £2.2million by assessors – is due to pay £1.1million in business rates.
That bill has rocketed by £312,022, or 39 per cent, in five years, from £793,588 in 2013-14.
Over that period, the bill the firm pays for the SNP’s ‘large business supplement’ has nearly quadrupled, from £15,164 to £56,810.
The Scottish Government also gradually increased the ‘poundage rate’ charged on larger premises over a number of years, before doubling it in 2016.
Michelin was so concerned by the increases imposed under the latest revaluation of the plant that it has submitted an appeal which has not yet been resolved.
Mr Mackay said he would consider offering the factory rates relief or taxpayer-funded financial aid in a bid to save jobs.
He said yesterday: ‘I have been clear that the Scottish Government will leave no stone unturned in our efforts to find a viable and sustainable future for the plant and its highly skilled workforce.
‘The Michelin Action Group will work tirelessly in the coming weeks to explore all options and provide Michelin with a proposition that demonstrates what support can be offered, be it business rates or financial aid, to help retain a presence in Dundee.
‘Working with the workforce and industry experts, the group will examine how the plant could be repurposed for the future if Michelin decides to press ahead with the closure.’
Industry leaders say the large business supplement, paid by every firm with premises valued at more than £51,000, has put a huge strain on Scots manufacturers and several other industries.
In Scotland, the large business supplement is set at 2.6 per cent – double the rate charged England.
A CBI Scotland spokesman said: ‘Businesses are concerned that the current business rates landscape is unable to keep up with realities on the ground.
‘Bringing the large business supplement into parity with England remains a key priority – as the higher rate can make Scotland less attractive to international investment, particularly when that investment includes the acquisition of commercial property.’
Michelin’s annual business rates bill increased from £793,588 in 2013-14 to £808,752 in 2014-15 and £830,656 in 2015-16.
It then jumped to £1.25million in 2016-17 – the year the large business supplement was doubled.
The figure fell back to £1.06million in 2017-18 but then rose again to £1.1million this year.
Yesterday, the Scottish Conservatives revealed that since 2016-17, large firms based north of the Border have paid £190million more than if they had been in other parts of the UK.
SNP figures show that in 201819, the total bill for firms paying the large business supplement is expected to be £129.2million.
A spokesman for Mr Mackay said: ‘If the Tories actually knew anything about this company they would know that the sole reason for their business rates increase was the multi-million pound expansion of the plant in 2016.
‘They should spend less time playing politics with people’s jobs and focus their efforts on solutions.’ in
‘Making life difficult’
Uncertain future: Workers leaving the Michelin factory after being told the entire staff will be losing their jobs in 18 months
Financial offers: Derek Mackay