MORAY BUSINESSES WHO have been hit with horrendous increases in their business rates from April have been thrown a lifeline – but only for the first year.
Finance Secretary Derek Mackay revealed a U-turn from his ruling SNP party yesterday when he told MSP’s that he will take direct action to support businesses facing increases they say would lead to closures.
Mr Mackay announced a 12.5% cap on increases for one year – for businesses who are concerned with the hospitality industry. So the move will help Moray’s hotels, pubs, clubs, cafes and restaurants and given them some breathing space to lodge appeals.
There was also a package that would see the same cap apply to all businesses – but only in Aberdeen and Aberdeenshire who, it is said, were badly affected by the downturn in the Oil industry and that skewered the revaluation exercise in a way that did not happen in other parts of the country.
That has angered many in Moray who point out that businesses in the region were also badly affected by the industry downturn – with around 500 jobs lost in Buckie alone.
The Cabinet Secretary also confirmed that the rates poundage, which is the core rate under which non-domestic rates are calculated. That will fall by 3.7% to 46.6p.
There was a general welcome from local politicians to the announcement with Moray MSP Richard Lochhead repeating his call for a prioritised appeals process.
He said: “In recent weeks I’ve met with many local businesses who were concerned about the scale of the rates increases they were facing, with those in the hospitality sector being hit particularly hard.
“I discussed the situation in Moray with the Finance Secretary in recent days and conveyed to him the impact the revaluation would have on local businesses and especially our hotels, restaurants and cafes.
“The Cabinet Secretary has clearly listened to businesses in Moray and the North East and has come to the rescue by providing substantial support to those most affected, and I know that local businesses will welcome the 12.5% cap on increases for the hospitality sector – especially given that some were facing hikes of over 200% following the independent revaluation.
“This action from the Scottish Government to help our hospitality sector is of huge importance given the significance of tourism to Moray’s economy.
“Any business still concerned about their valuation should meet the assessors before the final figures are released in mid-March and thereafter there is an appeals process. I am asking for hardship cases and the highest increases to be prioritised in that appeals process. The Moray Council also has the ability to introduce a relief scheme should there be any sectors that continue to need specific help.
“In the meantime, there is an ongoing review of business rates that will report in the summer.”
Not all good news
Tory regional MSP Douglas Ross commended businesses for highlighting the issue and fighting for a better deal from the Scottish Government.
Mr Ross said: “This announcement for the hospitality industry is very welcome. I can only commend the many businesses that highlighted the plight they would have faced had the proposed increases gone through.
“I spoke to many hotels and pubs who were facing staggering increases. Scottish Conservatives have been calling for action for weeks – the government originally said they were powerless to act, an opinion shared by SNP councillors in Moray only last week.
“But I am pleased to see they have recognised the turmoil these rate increases were causing and have agreed with us to make changes. It’s not all good news however. This cap is only in place for one year so we need to ensure that the Barclay review into rates recognises the impact huge business rate increases will have and what actions it will take to tackle this.
“There are also many businesses in Moray who will continue to see their rates increase and I want to have confidence that any appeal will be dealt with a swiftly and efficiently as possible.
“The Scottish Government has done the right thing for the hospitality industry over business rates. It would have been far better and saved a lot of anguish had they acted sooner but ultimately it is important that all the businesses who were facing huge increases know these will be capped at a maximum 12.5% this year.
“A 12.5% increase in itself is not an insignificant sum but hopefully far more manageable than some of the earlier hikes which were being proposed.”
Moray was also hit by Oil Industry downturn
Moray Councillor John Cowe has been at the forefront of the fight for a fairer deal for Moray businesses. He also expressed a hope that the Barclay Review on non-domestic rates in Scotland would produce a much fairer deal.
The chairman of the Moray Economic Partnership also insisted that Mr Mackay was wrong not to include Moray in the additional relief being offered to Aberdeen City and Aberdeenshire businesses affected by the downturn in the oil industry.
He said: “It is disappointing that there is to be no further deduction in the poundage and no change in the banding, but I obviously welcome what was a monumental U-turn from the Finance Secretary by capping the increases for hospitality businesses, so recognising that the rates were out of kilter.
“It was also disappointing that he did not specifically mention Moray but spoke several times of the downturn in the oil and gas industry for Aberdeen and Aberdeenshire – something that was also very much felt in Moray, where 500 jobs were lost through the downturn in Buckie alone. We should have a fair playing field for the entire north east.
“I would not say that, as Mr Lochhead put it, Mr Mackay was a ‘white knight’ – he was more of a timorous beastie that finally accepted the need to backtrack from his previously entrenched position that was so solidly picked up by SNP councillors in the chamber last week.
“Great credit must go to the Moray businesses who were facing this calamity – it has been a stressful time for them all but at least they have had a positive response even if just for a year.”