Meeting of the Parliament 26 October 2017
I welcome the opportunity to speak in the debate, particularly because I have hydro schemes in my constituency, which contribute a great deal to the local economy.
Scotland was one of the first countries in the world to harness electricity from its waters. As many members know, the Labour Party has a proud history of using hydro power to deliver social improvement. It was the late Tom Johnston—he was born in Kirkintilloch and was a Labour Secretary of State for Scotland—who was the driving force behind the Hydro-Electric Development (Scotland) Act 1943, which had the ambition to deliver power and social improvement to the people of the Highlands. The North of Scotland Hydro Electric Board was created following the act and is regarded as one of Tom Johnston’s greatest achievements. The board’s first hydroelectric scheme was in my constituency at Sloy dam, at the top of Loch Lomond; it was commissioned in 1950.
We are nothing if not parochial, so of course I argue that Loch Lomond rivals Loch Katrine. I also point out that Bruce Crawford and I did indeed share an ice cream on the campaign trail; I am duty bound to say that he did not pay for it.
Scotland’s hydro legacy is still visible. The hydro building programme of the 1950s and 1960s resulted in infrastructure that still produces electricity today; Sloy dam is still going strong. There are also new hydro power schemes at Luss in my area, and there are plans for a community-run scheme in Arrochar.
Hydro power supplies 12 per cent of Scottish energy at present, but there is huge untapped potential to develop more hydro schemes. In my area, I have found that smaller schemes are highly efficient, generally have fewer environmental concerns attached to them and create a number of new and highly skilled jobs. If it is to make the potential of the hydro power sector a reality, the Scottish Government must do everything in its power to create an environment in which businesses feel comfortable about making long-term investment decisions that will create and sustain jobs.
That takes me to a brief discussion of business rates. I very much welcome the finance secretary’s recent announcement that he will fast track valuation of hydro schemes and increase the upper threshold for relief to a rateable value of £5 million from 1 April 2018. That said, there is an absence of clarity about whether schemes to generate more than 1MW will be entitled to any rates relief at all, and those businesses are struggling with the huge increase in business rates now.
What I considered to be a small-scale hydro power plant in my constituency, with a size of 1.042MW, went from paying nothing in business rates up to April 2016 to paying more than £90,000 for this financial year alone. The operators receive no relief whatever despite being only 0.04MW over the limit. There is little that they can do to reduce their costs except restructure their business and, when businesses are restructured, there is the possibility of losing staff. That hydro scheme is not only producing renewable energy that is good for our environment; it is a business that creates good-quality jobs and contributes a great deal to the economy in my constituency.
I respectfully ask the Scottish Government to reconsider business rates relief for hydro projects; otherwise, many may struggle to survive and new projects will not proceed beyond the drawing board.
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