Non-Domestic Rates (Scotland) Bill: Stage 1

Part of the debate – in the Scottish Parliament at on 10 October 2019.

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Photo of Murdo Fraser Murdo Fraser Conservative

I feel that I must reiterate some of the comments that I made this morning in the chamber about the timing of this debate, because we have been left with one hour and 20 minutes for a stage 1 debate on an important bill, which a large number of people outside the Parliament—stakeholders, businesses and those involved with independent schools—are concerned about. It is an issue that we need to address as a Parliament. The primary purpose of Parliament is to scrutinise legislation—we are here to make laws. We do many other important things, but they are not as important as that, and Parliament needs to learn a lesson about timetabling debates such as this one.

Having got that off my chest, I want to give a general welcome to the Non-Domestic Rates (Scotland) Bill. In some areas, it does not go far enough, and we have concerns about what is being proposed in other areas but, overall, its measures are welcome.

As we have heard, the bill seeks to implement the findings of the Barclay review on non-domestic rates. It does not implement all the Barclay review recommendations. For example, Barclay recommended a change in the tax treatment of arm’s-length external organisations—ALEOs—whereby local authorities provide leisure and cultural services by means of an independent vehicle, thus making a business rates saving. The Scottish Conservatives vigorously opposed the original plan to remove that tax concession and, last year, I was pleased when the Scottish Government announced that it would not proceed with the introduction of what we called the swim tax. I am proud of that particular slogan.

There is much in the bill that we welcome. We welcome the move from five-year to three-year revaluations, which is supported by the business community. All members will have had the experience of hearing the concerns of businesses about the increases in business rates through revaluations that are set five years apart. Although there is an appeal process in place, that has led to specific reliefs being introduced to deal with the changes arising from revaluations. Reliefs were introduced for the hospitality sector, for example, and for premises in Aberdeen and the north-east. A move towards a three-year revaluation schedule should reduce the demand for specific reliefs in the future.

The Barclay review’s proposals for a business accelerator, which would create an incentive for businesses to expand and remove the existing disincentive for speculative development by landlords, is also a positive step. The relief is intended to stimulate growth and investment and it is one that we very much welcome.

However, we have concerns about certain areas of the bill. The first is the fact that the date of the next revaluation is set at 2022, which leaves a five-year gap since the last one. It is at least worth exploring whether the next revaluation can be brought forward a year, to 2021, which would bring us into line with the situation south of the border. If it is technically possible, that move would be welcomed by business.