Meeting of the Parliament 05 February 2020
I remind members of my entry in the register of members’ interests. I am a member of the Union of Shop, Distributive and Allied Workers and the Federation of Small Businesses. I am also a director of a company with retail interests—and I say that not just because it is my duty to do so as a parliamentarian, but because I rise to speak as a disgruntled shopkeeper.
I will tell members of my history with the non-domestic rates regime. In 2010, when I was running my business, the rateable value of one of my units went from £12,000 to more than £45,000 following revaluation. The appeal, which I had to take to the Lands Tribunal for Scotland, took 18 months. The assessor’s explanation and rationale for the change was that I was no longer using an entrance to the shop and therefore the RV was being applied to another portion. To my mind, there was a flaw in that logic: access between the two parts of the shop had been blocked up in 1972, yet, 30 years later, that was used as the rationale for the increase in my RV.
I tell that story to make the point that, for many small business owners, including small retailers, the non-domestic rates regime is opaque and unintuitive; the increases have been sporadic; and it has been extremely difficult to appeal. The bill is welcome, but it really only addresses those last two points. The three-yearly revaluations will provide consistency and remove the sporadic and large increases that some businesses have experienced. Likewise, the alteration to the appeals system is welcome, as anything that streamlines that process is welcome. However, for many business owners, the system will continue to feel largely arbitrary and unfathomable.
There are three things that still need to be done. First, we need increased transparency, because the methodology by which rateable values are calculated is extremely difficult to understand. I know from looking at my rates bill and the calculations that were made when I was taking forward my appeal that there were plug figures—literally arbitrary numbers—that inflated the value of certain areas. I do not see anything in the bill that will change that.
In my local area, after the most recent revaluation, I surveyed shopkeepers and found that, on average, they had experienced a 10 per cent rise in their rateable values, whereas rents had been largely flat in the same period, which takes me on to the second thing that needs to be done. Fundamentally, the bill fails to examine and reform the assessor system. It is a legacy that largely reflects the regional tier of government, which we no longer have. Much greater oversight and scrutiny is needed of assessors so that their calculations and the work that they do are transparent.
Thirdly, we need the process to be much more streamlined and intuitive and more in line with modern business practice. Unless the bill is backed up with real reform of the processes and technology that are used, businesses will continue to have issues in dealing with the non-domestic rates regime.
The most important point in the debate is that we need a comprehensive review of local government finance and taxation. The points that Andy Wightman and Willie Rennie have made on that today and previously are absolutely right. We must have full fiscal devolution and fiscal responsibility for local government. That cannot happen if we have piecemeal reform of the taxation powers that local authorities have at their disposal. Until we have that comprehensive review, we will continue to have issues with the non-domestic rates regime.
18:13