Mackay does U-turn on rate hike
● Pubs, hotels and hospitality sector all to benefit, along with North-east offices
Finance secretary Derek Mackay yesterday revealed a cap on business rates after pressure from small business owners over hugely inflated fees
Finance Secretary Derek Mackay has reacted to the outcry over business rates rises by promising a cap on increases of 12.5 per cent for hotels, pubs restaurants and cafés.
Mr Mackay also pledged support for more than 1,000 offices in Aberdeen and Aberdeenshire with increases capped at 12.5 per cent, in recognition of the tough times faced by businesses struggling to cope with the decline in the North Sea oil and gas industry.
After anger over proposed increases in rates arising from a revaluation, the Finance Secretary bowed to pressure from the business community and announced measures to lessen the impact of the changes.
Mr Mackay suggested the measures – which will cost the government £44.6 million this coming financial year – showed that he had listened to concerns.
While cautiously welcomed by business organisations, Mr Mackay’s political opponents accused him of adopting a “sticking plaster” approach, and questioned where the money would come from to finance the cap in future years.
Firms had warned they would be forced out of business, with some premises facing rate hikes of 400 per cent as a result of the revaluation coming into force in April.
In a statement to Holyrood, Mr Mackay said around 8,500 businesses in the hospitality sector would be eligible for the cap and added that renewables companies including hydro schemes would also be eligible for relief.
He confirmed there will be free revaluation appeals with no fees or restrictions as are imposed in other parts of the UK, and said the government would work with local authorities to introduce a local rates relief scheme to support key businesses.
He also promised early action on the Barclay review into business rates.
The cash for the measures comes from adjustments to Scottish Government contributions to the non-domestic rates pools.
Setting out his plans, Mr Mackay said: “It has become clear that there are some sectors and regions where the increase in rateable values is out of kilter with the wider picture of the revaluation.”
Ewan Macdonald-russell, head of policy for the Scottish Retail Consortium, said: “Mr Mackay’s announcement today is yet another sticking plaster on the suppurating wound of the unreformed business rates system. Today’s measures will hopefully help some of the businesses affected by the revaluation, albeit only by adding even further complexity to an already fiendishly complicated system.”
Conservative finance spokesman Murdo Fraser said: “We’ve heard on more than one occasion that this budget has been maxed out, yet once again Mr Mackay has been able to find a bit more money down the back of the couch.
“It’s a desperate 11th-hour move which will do very little to ease concerns within Scotland’s business community, given that it is for one year only.”