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Freeze business rates to ease burden amid costs crisis, Swinney urged

Deputy First Minister John Swinney has been urged to freeze business rates in a letter from 19 industry bodies.

Mr Swinney is in charge of the country’s finances while Finance Secretary Kate Forbes is on maternity leave and will announce the Scottish Government’s draft budget on December 15.

His budget will come at a time of immense pressure on public finances, and business leaders have urged him to “at least” freeze non-domestic rates.

Rates are paid on non-dwelling properties to local councils, but the rates are set centrally by the Scottish Government – which also has the power to freeze them, as was the case during the pandemic.

Chancellor Jeremy Hunt announced in his autumn statement that business rates would remain the same next year.

John Swinney
Deputy First Minister John Swinney will announce the Scottish Government’s draft budget on December 15 (PA)

The letter to Mr Swinney said: “Given the decision taken in the UK autumn statement, we ask that at the very least Scottish ministers follow suit and similarly freeze the headline business rate poundage in the coming financial year.

“This would aid firms with the costs crisis, help them keep down prices for customers, and ensure that no more Scottish commercial premises than currently do end up paying a higher business rate than applies down south.

“It would support business investment and retain Scotland’s competitiveness for most ratepayers.

“Our organisations have a range of ideas on how Scotland’s rates system could be improved.

“However, we collectively believe this practical measure to at least freeze the business rate requires to be taken in your upcoming Scottish budget, which would be a positive step applicable to all commercial premises and help ease the burden at this difficult time.”

Woman serving beer
Tory MSP Liz Smith said many businesses are still attempting to recover from the pandemic (PA)

The Scottish Retail Consortium, Scottish Financial Enterprise, CBI Scotland, the Scottish Chambers of Commerce, UKHospitality Scotland and the Scottish Tourism Alliance signed the letter.

Scottish Conservative finance spokeswoman Liz Smith supported the calls, saying businesses are “grappling with the global cost-of-living crisis and have barely had time to get back on their feet following the pandemic”.

She added: “They are desperate for urgent support from the SNP-Green Government in next month’s budget and freezing business rates for the year ahead would give them a much-needed boost.

“This is a measure that the Scottish Conservatives have repeatedly called on ministers to introduce but so far these calls have fallen on deaf ears.

“A whole host of sectors across Scotland would be impacted by a failure to implement this freeze so John Swinney must listen to their concerns and back these calls when delivering his budget next month.”

Public finance minister Tom Arthur said: “The Scottish Government recognises the enormous pressures facing businesses during the current crisis and has been engaging, directly and through key business organisations, to best understand their needs and will continue to do so.

“The Scottish Budget 2022-23 delivered the lowest non-domestic tax rate in the UK for the fourth year in a row, ensuring that more than 95% of non-domestic properties continue to be liable for a lower property tax rate than anywhere else in the UK.

“Tax policy decisions will be announced on 15 December as part of the 2023-24 Scottish Budget.”