Hansard

The third aspect of the Executive's proposals relates to the additional eligibility criteria. We believe that a properly researched relief scheme that is based on the principles that the committee set out last June should not need crude additional eligibility criteria, each of which would involve yet another threshold.We propose a £200,000 threshold for businesses. Corner shops that have very low margins cannot make a living on anything less than a turnover of £200,000. Should not they get relief?A six-employee threshold is one of the cornerstones of the paper. The owner of a café that has a £4,500 rateable value might think, "Great. I'll get the maximum relief—but hang on, I have seven part-time employees. I'll sack one to get the relief." Thresholds distort competition and restrict growth and we now have not one, but three thresholds: on rateable value, on turnover, and on employees. Why not chuck in one on the number of windows in the premises or on the number of cars the owner has? The position could not get any worse. If this is the best scheme that the Executive could come up with, God help us. Surely the devolved Parliament should mean well-researched solutions to help business. Instead, we meekly follow what is going on south of the border.It is shameful that so little time and effort has been spent on three fundamental issues, which have been ignored in the proposal. First, there has been no research into the Scottish rental position, but the relationship between rent and rates is case-proven. That has not been disputed since 1995. Therefore straight away, 50 per cent of businesses receive no relief. Secondly, there has been no investigation of the impact on town centres. Bill Anderson has already given the committee chapter and verse on that. If that is the case in Elgin, Inverness and Stirling, what about Glasgow? One can imagine what the rateable values are there. Thirdly, nobody in the civil service has helped the ministers and nobody in the Scottish Valuation and Rating Council has spent the 30 minutes that it would take to go through the valuation rolls to check out that the whole of the tourism industry might as well write off the relief. We cannot believe that those three gross errors have been made in producing the proposals.We cannot have this apology for a scheme—we need something better. We need a relief scheme that picks up the principles that the committee outlined last June. There should be a scheme that enjoys the support of the small-business community. Eighty-nine per cent of our members have rejected any scheme that is based on rateable value. We encourage the committee to ask other organisations that give evidence whether they have consulted their members by ballot on the matter. Any scheme should target relief according to the size of the business, rather than the premises, and it should avoid discriminatory thresholds. A scheme should not discriminate against tourism businesses or any other sector. The size of the business should be measured on current information. The scheme should taper relief and not shoehorn in unnecessary thresholds. The scheme should not produce unnecessary appeals and should not give relief to landlords, but not to tenants. It should be simple for the Executive, for local authorities and for businesses to apply the scheme and it should be a scheme that we can all follow reasonably well.There should be a dual-tapered scheme, as we told the committee previously. Such a scheme would make use of employers' national insurance contributions as well as rateable value or gross rates paid. The use of rates liability and national insurance produces a flat taper that ensures that any decisions that a business makes are not distorted or confused by a relief scheme.As far as implementation of such a scheme is concerned, the key stakeholders need fear nothing. First, the business owner would apply the scheme in exactly the same way as statutory sick pay is applied now. Statutory sick pay is already reimbursed—businesses claim it monthly or quarterly as a deduction from their tax and NI payments according to tables that the Inland Revenue provides. It is fully administered through the pay-as-you-earn scheme. The business owner would simply register the relevant premises with the tax office and the local authority would, on request, provide the Inland Revenue with data regarding occupancy. That also goes for the assessors. The Executive would supervise the scheme overall, and some form of adjustment of the redistribution formula would need to be applied to business rates to ensure that the national insurance fund was reimbursed by the amount of money that was paid out in business rates relief.Where would the burden of administration fall? It would fall on the Inland Revenue. We have considered the matter and discussed it with Inland Revenue officials, and we can safely say that the requirements on the Inland Revenue would all be deliverable within existing Inland Revenue structures. There would be a cost, but it would not be disproportionate to the benefit, and the cost implications fit into the existing structures.I will summarise. First, the proposed scheme does not satisfy the principles that the Local Government Committee arrived at in June—after seven months of deliberation. Secondly, it discriminates significantly against huge tranches of the small-business community in Scotland. Thirdly, there is a better alternative that follows the principles that the committee upheld.