Meeting of the Parliament 05 February 2020
Liz Smith has engaged with Dollar academy and many of the parents in Dollar on the issue and they share many of our concerns. There is a concern about this.
What we have not heard from the Scottish Government, or from the minister yesterday, is any attempt to defend or justify the policy. I suspect that what really lies behind it is that it is an easy sector to attack. It has few political friends. This all has the unhealthy stench of the politics of envy. That is the reason why, with regret, we cannot support the bill despite agreeing with a lot of what it contains.
There is a broader point in relation to rates. Although the Barclay review recommendations are generally positive, our concern is that they do not go far enough. There is a serious debate to be had about the future of the rating system more generally. What we have seen in recent years are a number of sticking-plaster solutions being introduced to deal with complaints from businesses about rates increases from revaluations, such as the reliefs that have been brought in for the hospitality sector and for offices in the north-east of Scotland. Moving from a five-year to a three-year cycle will improve matters, but it will not eradicate the problem entirely.
There is also a serious question as to whether a property-based tax is still relevant, particularly as it relates to a sector such as retail, in an environment in which retail is increasingly under pressure from online traders. There is simply no level playing field between online retail and the sector that has to support high street premises. Therefore, it is our view that a more fundamental look at the whole rating system is required, as is being proposed by the Government south of the border. I know that that view is widely supported in the business community, and I hope that the Scottish Government will undertake such an exercise in the future.
No discussion on rates would be complete without a mention of the large business supplement, which in Scotland is currently set at a rate that is nearly double that south of the border. More than 5,000 retail premises in Scotland pay the LBS and, cumulatively, they contribute more than £14 million annually. The higher rate in Scotland puts those businesses at a competitive disadvantage to businesses in the rest of the UK. The LBS is a measure that is long overdue for being dealt with and—who knows?—maybe the Cabinet Secretary for Finance, Economy and Fair Work will have some good news for us on that in tomorrow’s budget.
Although there is much in the bill that we support, because of the tax raid on independent schools, which will damage local economies and which seems to be motivated purely by the politics of envy, I regret that we will not be able to support it at decision time.
17:46