The Press and Journal (Aberdeen and Aberdeenshire)
Businesses triumph in battle over rates – but hotelier hits out
Politics: Finance secretary bows to widespread pressure with relief package
FINANCE Secretary Derek Mackay’s measures to tackle the business rates crisis was last night dismissed as a “sticking plaster” for the problem.
The Scottish Government announced a relief package of nearly £45million, which includes capping hospitality rates increases at 12.5% for a year.
The same limit has also been put in places for offices in Aberdeen and Aberdeenshire to help offset the oil downturn.
But while recognition of the northeast’s plight was welcomed, many traders did not feel the relief goes far enough – with leading hotelier Stewart Spence describing the year-long cap as merely a “sticking plaster” for the problem.
However Eric Shearer, a partner at Knight Frank, said the office cap had to be welcomed as “great news” – though vowed to continue campaigning to make the system fairer.
Finance Secretary Derek Mackay bowed to mounting pressure yesterday and announced nearly £45million of relief for firms facing soaring business rates.
The upcoming changes to rateable value (RV) have provoked outrage across the north and north-east, with many traders facing rises of up to 250% – prompting warnings of job losses and closures.
There has been a particular backlash in the northeast, as the proposed increases are based on property values in 2015 – before the full effects of the oil and gas downturn were felt.
Across the north and Moray, fears were raised about the impact the rises would have on the all-important tourism industry – and the Press and Journal was the first to highlight the plights of businesses across the region.
Scottish Government ministers have long said that they could do little to offset the rise – arguing it was in the hands of independent assessors.
“The measures cannot take away all of the pain of the revaluation”
But yesterday the embattled finance secretary unveiled a £40million package which will mean rates rises on all hotels, cafes and pubs across Scotland will be capped at 12.5% for a year.
Some £4.9million of the fund will go to Aberdeen
and Aberdeenshire offices – which will also have their increase capped at 12.5% – with Mr Mackay admitting he “recognised” the struggles of the north-east.
It is understood the relief will come from other government funds.
But there was anger in the chamber that relief was not being offered to the NHS or the oil and gas sector.
Last night, opposition groups and businesses welcomed the announcement but said Mr Mackay had been “forced” to make an “embarrassing U-turn” on the issue after constant pressure.
The announcement comes hot on the heels of another SNP climbdown, where the government had to scrap controversial council tax plans and find more funds for councils.
Welcoming the announcement James Bream, the research and policy director at Aberdeen and Grampian Chamber of Commerce, said: “The measures cannot take away all of the pain of the revaluation but are very welcome, it would be churlish to argue about the scale of support at this stage.
“The chamber has been working on this issue since last June representing members and therefore around 130,000 people in the north-east. The Scottish Government has taken the time to listen and we can now work locally to implement solutions.”
North-east politicians also welcomed the changes, saying they had been “lobbying” the government behind the scenes to get the concessions.
North-east SNP MSP Gillian Martin said: “With the existing package of support alone, over 20,000 businesses in the northeast are seeing no change or a reduction in the rates they pay. In other words: the best package of support for small businesses in the UK. However, we recognise the legitimate concerns of businesses here in the north-east, which have faced significant challenges following the downturn in the oil and gas industry.
“That’s why it’s absolutely right that Derek Mackay has worked so closely with them to deliver the further measures he set out.”
Callum McCaig, MP for Aberdeen South and the SNP’s business and energy spokesman in Westminster, added: “Businesses across the city and shire did well to engage with the Scottish Government to ensure their voices were heard on this issue.”
Gordon MP Alex Salmond added: “This additional help will be welcomed by all those with the interest of Scottish business
“It appears there will still be about 8,000 businesses that will not benefit”
and jobs at heart. It is a very positive move from the Scottish Government.”
But opposition politicians last night rounded on the “forced” announcement.
North East Tory MSP Liam Kerr said: “It has taken more than a month of pressure from the Scottish Conservatives and bad headlines in the press for the finance secretary to finally take action. A 12.5% cap will be welcomed by the hospitality sector and will make a difference to the hefty bills levied on office premises.
“However, based on the Scottish Government figures, it appears there will still be about 8,000 businesses in the region that will not benefit.”
City council leader Jenny Laing said: “This is a great victory for the Press and Journal and all of the politicians and businesses who squared up to (Derek Mackay). He has been forced into a humiliating U-turn, just as he was with his plans to cut local authority budgets.”
North East Liberal Democrat MSP Mike Rumbles said: “It’s thanks to hundreds of local people who stood up to the government, with the support of many of us in the Scottish Parliament and of course the Press and Journal campaign, that the rates increase has been relaxed for thousands of hotels, restaurants and pubs.”