Meeting of the Parliament 05 February 2020
I am pleased to take part in tonight’s stage 3 debate on the Non-Domestic Rates (Scotland) Bill. As my colleague Murdo Fraser has outlined, the Scottish Conservatives are not able to support it.
As a member of the Local Government and Communities Committee, I thank all those who gave evidence and briefings and who supported the committee during the bill’s passage.
For some time, the Scottish Conservatives have been calling for a comprehensive review of the Scottish rates regime. In recent years, rates revaluations have had a negative impact on Scottish businesses, particularly in the north-east, and Derek Mackay announced a package of relief measures worth £40 million to address that issue only after pressure from the Scottish Conservatives. However, the bill does not go far enough in addressing the more fundamental problems with the current rates regime.
One of the Barclay review’s main recommendations was to halve the large business supplement to bring it into line with the rate set in England. That will not be immediately implemented through the bill, and the Scottish Government has gone only as far as committing to implement it when it is affordable. That means that larger Scottish businesses will remain at a competitive disadvantage to their counterparts south of the border.
Although we supported a stage 2 amendment to allow localism to be debated, local authorities—through COSLA—and the business community raised concerns about the proposed approach. As a party, we are committed to devolving more powers to local authorities, and more flexibility and control over businesses rates. However, it is clear that we need to take a holistic approach to considering such devolved decision making, rather than the piecemeal approach that would have resulted from what was proposed.
One of the most concerning measures in the bill is the removal of charitable rates relief from independent schools, which is currently afforded to the private education sector. I pay tribute to my colleague Liz Smith MSP, who worked tirelessly on that issue with the sector.
Private schools teach about 4 per cent of all pupils in Scotland. Many of them struggle to meet their day-to-day running costs, and the bill could necessitate fee increases, cuts to bursaries or even closures. In turn, that will mean that more pupils will need to be educated in the state sector, leading to a burden on the taxpayer that will be greater than any increase in income from business rates.
As I mentioned yesterday, my region of Mid Scotland and Fife has many schools that fall into that category, including Dollar academy in Clackmannanshire, and Glenalmond college, Kilgraston school, Strathallan school and Morrison’s academy in Perthshire. All those schools could be jeopardised by the change in policy. The schools not only benefit the pupils who attend, but have a positive impact on their communities. They all have close links with state schools in their local areas and provide them with encouragement and support, and indirect and direct employment by the schools has an impact on the business community.
Education is a public good that benefits everyone, not just those who are in receipt of it, regardless of whether it is delivered by the state or by the independent sector, or whether parents pay fees directly to schools or indirectly through their taxes.
Time is moving on, so I will conclude. It is important to put on the record that the bill contains several changes to the rates system that we fully endorse and support. Unfortunately, the bill, both as introduced and in its amended form, will not deliver the wholesale review of business rates that we need and want, and it will harm our education sector. It is therefore regrettable and disappointing that we cannot support it at decision time.
18:09