South Scotland MSP Colin Smyth has welcomed the SNP’s last-ditch business rates U-turn – but expressed concern public services in the area could still face a sharp tax rise on some of their buildings.
Scottish Government Finance Secretary Derek Mackay was forced into a humiliating climbdown after thousands of firms raised concerns that they could be forced to make employees redundant or even go bankrupt due to punitive rises as a result of the recent Government rates review.
Due to the backlash Mr Mackay confirmed in the Scottish Parliament yesterday (21 February 2017) that rises for hotels, pubs, cafes and restaurants will be capped at 12.5 per cent.
But public sector institutions such as the NHS could still face a major hike in bills for some of their buildings.
South Scotland MSP Colin Smyth said, “People accept that a rates revaluation was overdue. It was appalling that the Scottish Government scrapped the planned revaluation in 2015 just because it was close to the Scottish Parliament election. It meant hundreds of businesses across Dumfries and Galloway, particularly in our town centres were paying astronomical rates. The rateable value is largely based on the rent of a property. We have seen the rent value for most town centre properties fall in recent years but because there hasn’t been a rates revaluation since 2010 so rates have stayed artificially high.
However, due this revaluation there are some businesses that would have seen totally unacceptable increases such as hotels, bars and restaurants; so the Government’s last-ditch U-turn is welcome.
For too long the SNP simply refused to listen to firms who were crying out for support. The Government support will still mean sharp rises for many businesses because the cap on increases doesn’t kick in until your rates increase by 12.5%. If you are a business facing a 12.4% rise in your rates bill it is still a big increase.”
“Question marks also remain over how much this additional relief will cost and how it will be funded and because the money is only in place for one year, the danger is that businesses could an uncertain time waiting to see what happens next year"
“It is also deeply concerning that some public services, such as hospitals, could see a rise in rates. That means money coming out of NHS services to go on rates at a time the NHS is already facing huge cuts”