SNP finally promises Scottish firms help with huge business rates hikes

Scotland’s Finance Minister has finally bowed to pressure for him to provide extra support for firms facing crippling increases in their business rates as the widespread outcry threatened to inflict major political damage on the SNP.

Derek Mackay said he would set out the details of a new financial package in a parliamentary statement this afternoon that he said would help “key regions and sectors” cope with the rise.

His announcement came following weeks of warnings from businesses across the country that they face laying off staff, passing the additional cost onto customers or going under. Some have even threatened to join a non-payment campaign led by an Aberdeenshire hotelier who is a friend of Alex Salmond.

Mr Mackay initially claimed the increases were the responsibility of councils and they could provide relief if they wished. He performed the about-turn ahead of an appearance in the Holyrood chamber this afternoon when he was expected to face a barrage of hostile questions from opposition MSPs.

The Scottish Conservatives said the minister had only acted after ignoring months of warnings and being “dragged to parliament kicking and screaming.”

His pledge of extra help came as Labour published an analysis showing Scotland’s largest university campuses and buildings are to be hit with an average 25 per cent increase in their rateable values in April.

The Scottish Government said the figures did not take full account of the charitable relief higher education institutions receive but Universities Scotland said the rise was “most unwelcome” and would eat into the funds they have for teaching and research.

The owners of Scotland’s holiday let properties also intensified the pressure on Mr Mackay to act by disclosing they are facing increases in their properties’ rateable values of up to 269 per cent and averaging 65 per cent.

The Association of Scotland’s Self-Caterers (ASSC), warned the steep increases would have “potentially severe consequences for the sector” and urged him to introduce a transitional relief scheme, pending the completion of an official review of the business rates regime.

It is based on the annual rent council-employed assessors estimate business premises would command on the open market and a “poundage” rate set by the Scottish Government.

The increases follow the first revaluation of rental values since 2010. Most business premises in Scotland have been reassessed, including shops, offices, warehouses and factories.

Although companies can appeal against their increases, experts have warned that many face going under before their cases are heard, with the earliest hearings not expected until early 2018.

Speaking ahead of his parliamentary statement, Mr Mackay said a combination of a cut in the poundage rate and a bonus scheme for small firms means seven out of ten premises will attract a business rates bill that is the same or lower next year.

He added: “Before the new property values came out I took action to support business. Since then I have been listening to firms across Scotland and today I will set out further steps to support Scotland’s economy.”

Murdo Fraser, the Scottish Tories’ Shadow Finance Minister, said: “Derek Mackay was warned months ago about the damage that these rates increases could cause, but it’s taken until now for him to do anything about it.

“It was clear that a crisis was emerging but instead of acting the SNP sat back and tried to pretend that it had nothing to do with them. Businesses weren’t buying it, and they’ll now want reassurances that the SNP will take urgent action to redress this situation.”

The Labour analysis said the valuation of Scotland’s largest university campuses and buildings had increased by £14.4 million to £70.5 million.

This total included a £1.6 million increase in the valuation of Edinburgh University’s King’s Buildings, a £520,000 rise for Aberdeen University’s medical school, a £675,000 increase for Glasgow University’s Gilmorehill campus and a £448,000 rise for St Andrews’ North Haugh site.

Jackie Baillie, the party’s economy spokesman, said: “The SNP's business rates bombshell could cost universities millions of pounds. With each passing day the devastating consequences of business rates under the SNP is becoming clear.”

A Universities Scotland spokesman said: “The rise in business rates which is being faced by most universities is unwelcome at a time when funding for the sector has decreased in real terms.”

A Scottish Government spokesman said: “The first step open to all those businesses who are concerned is to contact the assessor and discuss how they worked out the provisional value. Companies have until September to appeal and we would encourage firms to take up those opportunities.”