Cham­ber says rate changes ‘could bank­rupt busi­nesses’

Reval­u­a­tions: Fi­nance sec­re­tary urged to re­think ‘puni­tive’ levy

The Press and Journal (North-East) - - News - BY AN­DREW LID­DLE

Hun­dreds of north-east busi­nesses could be bankrupted by “puni­tive” busi­ness rate changes, lo­cal in­dus­try lead­ers have warned.

Aberdeen and Grampian Cham­ber of Com­merce (AGCC) has writ­ten to Fi­nance Sec­re­tary Derek Mackay urg­ing him to re­think a reval­u­a­tion of the levy which could see com­pa­nies’ bills rocket by more than 200%.

The eco­nomic body ar­gues that the in­creases are par­tic­u­larly ill-thoughtout given the re­cent down­turn

“Fail­ure to do so could see some com­pa­nies go­ing to the wall”

in the oil and gas in­dus­try.

The in­ter­ven­tion came as the Scot­tish Con­ser­va­tives called for the Holy­rood Gov­ern­ment to set up a fund to pro­vide tran­si­tional re­lief for firms hit by rock­et­ing rates.

The let­ter states: “The reval­u­a­tions (RVs) would re­sult in enor­mous up­ward cost pres­sure on north­east busi­nesses, which are al­ready strug­gling with the im­pacts of an ex­tended eco­nomic down­turn.

“In the past cou­ple of years our re­gion has suf­fered tens of thou­sands of job losses, re­duced eco­nomic out­put, de­creased prop­erty sales, fall­ing ho­tel rev­enues, and an in­crease in cor­po­rate in­sol­ven­cies.

“The RVs pro­posed for 2017 have the po­ten­tial to drive many re­gional busi­nesses which have man­aged to stay afloat into in­sol­vency or at best to lead to fur­ther job losses.

“This is com­ing at a time when the Scot­tish Gov­ern­ment needs to do even more to help the re­gion, not cre­ate ad­di­tional hur­dles.”

Of­fi­cial gov­ern­ment fig­ures have shown that lo­cal pub­li­cans are fac­ing rises in their bills of up to 259%, while oil ser­vice com­pa­nies are sim­i­larly look­ing at in­creases of up to 218%. Com­par­a­tive fig­ures for the rest of the UK show that in­creases in the north-east out­strip those fac­ing other parts of Scot­land and all but one re­gion in Eng­land. The fig­ures have led Tory MSPs to call for a gov­ern­ment fund to help busi­nesses af­fected by the hikes.

In a joint state­ment, Aberdeen­shire West’s Alexan­der Bur­nett and north-east re­gion rep­re­sen­ta­tives Ross Thom­son, Peter Chap­man, Liam Kerr and Bill Bow­man, said: “It is no ex­ag­ger­a­tion to say that fail­ure to do so could see some com­pa­nies go­ing to the wall.

“Given the well-doc­u­mented dif­fi­cul­ties in the lo­cal econ­omy, the Scot­tish Gov­ern­ment must step in to pre­vent fur­ther job losses at a time when thou­sands of posts have al­ready been cut.”

A Scot­tish Gov­ern­ment spokesman said: “The Small Busi­ness Bonus Scheme will be ex­panded from 2017 to lift 100,000 prop­er­ties out of rates com­pletely, while 8,000 busi­ness prop­er­ties will no longer pay the Large Busi­ness Sup­ple­ment, and the over­all busi­ness rates poundage – the core tax rate that ap­plies to the rate­able value of busi­ness prop­er­ties – will also be cut by 3.7% to 46.6p.

“The Scot­tish Gov­ern­ment re­mains com­mit­ted to sup­port­ing the econ­omy in the north-east.”

AP­PEAL: Derek Mackay, Cab­i­net Sec­re­tary for Fi­nance and the Con­sti­tu­tion

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