Committee
Local Government Committee, 01 May 2001
01 May 2001 · S1 · Local Government Committee
Item of business
Non-domestic Rates
Bill Anderson:
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I have watched revaluations since 1985. People have various motivations for appealing, such as trying to reduce a valuation. For example, the Highlander Inn—members have seen a photograph of it—has a rateable value of £10,400. If the proposed scheme had operated when it was valued, the business owner would have had every encouragement to try to reduce its valuation below £10,000 and possibly below £8,000. Any surveyor who tried to sell the idea of an appeal would say, "Look chum—if I can get you below £8,000, you'll get relief. If I get you below £10,000, you'll save the surcharge." The system would provide an added incentive for valuation appeals, as the committee correctly said in its report.
In the same item of business
The Convener:
Lab
We return to the issue of non-domestic rates for the next item on the agenda. In November 1999, the committee held a short inquiry into the revaluation of no...
Gerry Dowds (Forum of Private Business):
I thank the committee for welcoming us here today.Committee members should have received a copy of the presentation format that we would like to walk everyon...
Bill Anderson (Forum of Private Business):
The committee has a copy of the nice colour photos. The report that you were given earlier contains the black-and-white copies of the photos. We want to cons...
The Convener:
Lab
Could I interrupt to say that I think that we have got the message about rateable values? Could we move on, as I am conscious of the time and of the fact tha...
Bill Anderson:
I will finish on that point.
Gerry Dowds:
The third aspect of the Executive's proposals relates to the additional eligibility criteria. We believe that a properly researched relief scheme that is bas...
The Convener:
Lab
Thank you. I shall start the ball rolling, while other members decide what questions they will ask.Paragraph 1.6 of the Executive consultation paper deals wi...
Gerry Dowds:
Do you mean our scheme or the Executive's proposals?
The Convener:
Lab
The Executive's proposals. Why do you suggest that they aim relief at premises, not businesses?
Gerry Dowds:
Essentially, because the Executive has chosen to determine relief based on rateable value. Rateable values are tagged to premises, not to the dynamics of the...
Mr Michael McMahon (Hamilton North and Bellshill) (Lab):
Lab
In paragraphs 1.11 and 1.12 of the Scottish Executive's consultation paper, it is suggested that certain types of property, such as advertising hoardings and...
Nick Goulding (Forum of Private Business):
That depends on who owns and who operates the property, because it forms part of the overall rateable base of a business. In the vast majority of cases—almos...
Mr McMahon:
Lab
So, if a small, independent business is operating beside a chain store, the turnover of the independent proprietor alone should be counted, not the overall i...
Nick Goulding:
It is not turnover that we are suggesting as an indicator, because there are specific problems in measuring turnover, which I could explain in more detail. I...
Mr McMahon:
Lab
Is it possible for a company with a chain of shops to work at tight margins in every outlet, but to appear quite profitable overall? Would such a company be ...
Nick Goulding:
I understand the question, but further research would be required on the impact at the margins of that sort of business. On average, taking into account sect...
Mr Kenneth Gibson (Glasgow) (SNP):
SNP
Gerry Dowds talked about the way in which landlords would benefit if the focus were on small properties, rather than on small businesses. Would that happen u...
Gerry Dowds:
No.
Mr Gibson:
SNP
Why would the situation be different?
Gerry Dowds:
Our proposed scheme targets a business by using two measurements, the first of which is a true measurement of the size of the business. Any reasonable criter...
Mr Gibson:
SNP
I am conversant with that argument. However, if relief were delivered under your scheme, businesses would become more prosperous. Would that tempt landlords ...
Nick Goulding:
The fundamental difference is in transparency in the property market. If the criteria on which rateable value is based are transparent in the property market...
Mr Gibson:
SNP
I understand. In point 2E of your response to the Executive's consultation document, you quote the committee's report, which stated:"The Committee considers ...
Bill Anderson:
We suggest that because the Executive's scheme is not tapered. A scheme with steps continues to have the problem that going up to the next step means a step ...
Mr Gibson:
SNP
Is that the point at which floods of appeals will be made?
Bill Anderson:
I have watched revaluations since 1985. People have various motivations for appealing, such as trying to reduce a valuation. For example, the Highlander Inn—...
Mr Gibson:
SNP
So the scheme would be unworkable because of that sole criterion—I know that you mentioned several criteria, which I will not explore, as other members want ...
Gerry Dowds:
A taper delivers a curve, which means that decisions are not distorted, because they will have the impact of only a small incremental movement on the busines...
The Convener:
Lab
Gil Paterson would like to ask a quick question.
Mr Gil Paterson (Central Scotland) (SNP):
SNP
Gerry Dowds has answered my question.