The Scottish Government has confirmed that it will not follow counterparts in England and Wales by offering business rates relief to hard pressed companies in the hospitality sector.
Industry bodies are warning that Scottish businesses are in "jeopardy", having not benefitted from any business rates relief since June last year. Meanwhile, firms south of the border have been supported by relief since the pandemic and will continue to be supported by up to 75% relief on business rates in the coming financial year.
When pressed on the issue at Holyrood yesterday, Public Finance Minister Tom Arthur told MSPs that the government had "no current plans to introduce any further reliefs".
UKHospitality Scotland say Scottish firms are operating at a ‘significant disadvantage’ to their English counterparts and there are also fears that the difference could starve Scottish high streets of investment in hospitality, undermining efforts to regenerate towns and city centres.
'Short-changed'
Glasgow Conservative MSP Annie Wells claims 100,000 Scottish businesses are being "short-changed", and urged Mr Arthur to intervene.
Responding to her question in the Scottish Parliament yesterday, Mr Arthur said the government was already providing "the most generous package of rates relief for businesses anywhere in the UK", which includes freezing the poundage.
He said: "Having set out a strong non-domestic rates package in the draft budget, the Scottish Government has no current plans to introduce any further reliefs. As a result of that package, around half the properties in the retail, hospitality and leisure sectors in Scotland will already pay no rates in 2023-24 due to the most generous small business relief in the United Kingdom.
"The budget statement also delivered the number one ask of the business community by freezing the poundage, delivering the lowest poundage in the UK for the fifth year in a row."
£85million 'would have to be cut from elsewhere'
SNP MSP Kenneth Gibson quizzed the minister how much would it cost to provide 75% rates relief for all hospitality businesses.
"Has Ms Wells or any other Tory MSP suggested from where in the Scottish budget those resources should be found or whether taxes should be increased to pay for such a relief?" he asked.
Mr Arthur confirmed that mirroring the reliefs in place in England would cost around £85million.
He added: "As I mentioned in my answer to Annie Wells, under our package of reliefs, which is worth an estimated £744million, around half the properties in the retail, hospitality and leisure sectors will benefit from 100% small business bonus scheme relief in 2023-23.
"As I said, if any party wants to enhance the package of reliefs that is on offer in the budget, I would welcome hearing their alternative, fully funded proposals."
Door open for rates reform discussion
Labour member Daniel Johnson urged the minister to give consideration to wider rates reform, citing the bills faced by retailers, who pay a fifth of non-domestic rates in Scotland despite accounting for just 10% of the economy.
"Short of a discount, does the minister agree that there is a case for rebalancing and recalibrating what sectors pay based on their economic contribution?" he asked.
Mr Arthur described the rates system as a "complex issue", but said his "door is always open" to anyone wishing to discuss reforms.
He said: "The point that he (Mr Johnson) touches on is one that I appreciate is a broader concern for members about how non-domestic rates operate, namely the lack of a correlation between the rateable value and the economic performance of a business.
"That prompts the question of fundamental non-domestic rates relief reform and non-domestic rates reform more generally. This is a complex area, but I am happy to discuss it with members. My door is always open to any member who wishes to discuss such matters in more detail."