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Non-domestic rates are a vital part of the funding that enables our local authorities to deliver the local services that people rely on. In the Local Government and Communities Committee’s evidence gathering in advance of this year’s
Scottish Government budget, a key issue that was raised by witnesses was the financial cliff edge that local government faces. Therefore, ensuring that non-domestic rates are effective, that they enable funding for local services and that they are fair for our businesses and those organisations in the public sector that pay them is crucial.
Scottish Labour welcomes the broad thrust of the legislation, because it will make the system more effective and fairer in terms of its coverage. However, we believe that the legislation is a missed opportunity. It could have delivered more to incentivise culture change and address the challenges that our businesses and communities are facing.
The majority of the provisions in the bill are welcome: for example, the move to three-year valuations; the removal of charitable relief from independent schools; and measures to cut down on speculative appeals. However, the details of many of those areas will be left to Government to develop and implement after the bill has been passed, and their success will depend on consultation right across Government and with stakeholders, and on joint working with local authorities.
In some instances, the Government has given itself too much power and Scottish Labour believes that the bill should be amended at stage 2 to allow Parliament to scrutinise any further actions that are taken on business rates. Furthermore, we think that the bill represents a disappointing lack of ambition from the Government. It is limited to the scope of the Barclay review, which was itself too narrow.
I highlight that the bill should have engaged further with the current struggles that our high street is facing and evidence from the business community that aspects of the rating system deter growth. I particularly commend the representations of the Union of Shop, Distributive and Allied Workers—USDAW—to the minister. Those are worth taking on board.