THE SNP's Finance Secretary Derek Mackay has capped business rate increases for the hospitality sector in response to widespread concern about the impact of a revaluation.
Mackay told MSPs a 12.5% cap on bill rises for restaurants, pubs, hotels and cafes would also apply to office premises in Aberdeen and Aberdeenshire, to reflect a downturn in the North Sea economy.
A package of extra support for the renewables sector was also set out by Mackay in the Holyrood chamber.
He has faced growing pressure to intervene to help businesses cope with the first revaluation of the rateable value of businesses since 2010 amid warnings many facing large increases could be forced to close or shed staff.
The move has been welcomed by Scottish retailers, but the Scottish Retail Consortium (SRC) expressed worries that it would not fix the underlying issues.
Ewan MacDonald-Russell, SRC head of policy, labelled the rates system as “no longer fit for purpose”.
Responding to the latest move, he 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.
“However, it will do little to deal with the underlying problem caused by revaluations which take place too rarely to flex with the economic conditions.”
The Finance Secretary said measures already put in place by the Scottish Government meant seven out of ten business premises would be better or no worse-off after the revaluation, with more than half paying no rates at all.
Mackay added: “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.
“I can confirm to the chamber today that we will offer a new national relief that caps increases for hotels at 12.5%.
“Because we recognise that we must maintain fairness between hotels, pubs, cafes and restaurants, this will apply across those businesses too.
“That will benefit around 8,500 premises and provides proportionately more support to the sector in Scotland than is available in the rest of the UK.”
Labour MSP Jackie Baillie said: “I have to say I’m positively dizzy with the speed of the u-turn but I welcome it nonetheless because at a time of increasing economic turmoil business in my constituency and across Scotland tell us that the rates rises would have led to job losses, and that’s not something any of us want to see.”
A package of relief for the renewables sector will include rolling forward current rates relief of up to 100% for qualifying community renewables projects, capping rates bill increases at 12.5% for small-scale hydro schemes and a new 50% rates relief for district heating schemes.
Mackay told MSPs they would take early action on the findings of a review being led by former RBS chairman Ken Barclay into business rates due to report in July and would work with councils to introduce a local rates relief scheme.
He said the total package of support offered by the government through rates relief was worth £600 million but faced questions on where the funding for the new measures was being found, and confirmed the cap on rate increases would be in place for one year only.
Conservative MSP Murdo Fraser said the measures were “all too typical of the actions of a government that time and time again falls asleep at the wheel and only wakes up when it crashes the car into the wall”.
He said: “For weeks the Finance Secretary has been denying there is an issue with the business rates revaluation, for weeks he and his colleagues have refused to act despite all the evidence facing them.
“At last he has been forced to come to this parliament and offer some relief to some of the many businesses affected.”
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