STA Update: Deputy First Minister responds to letter from business bodies calling for rates freeze

Deputy First Minister, John Swinney, has responded to a letter jointly written by nineteen leading business representative groups and industry bodies, asking for him to freeze the business rate in the coming financial year.

Business Rate Poundage

Thanks to you and colleagues for sharing your views on non-domestic rates ahead of the 23-24 Scottish Budget.

I welcome your collective recognition of the scale of the financial challenge that Scotland is facing and the difficult choices ahead. You will be aware that the Office for Budget Responsibility’s (OBR) forecasts present a very challenging economic outlook and inflation is having a significant impact on public finances.

Unfortunately, the UK Government Autumn Statement did not go nearly far enough to ensure that the Scottish Government can support people, communities and businesses through the most challenging financial situation since devolution. With confirmation that inflation has risen again to 11.1% and is now at a 41 year high, households and businesses across Scotland are paying a steep price for the economic mismanagement by the UK Government.

On 15 December, I will present my spending plans for next year to the Scottish Parliament as part of the 2023-24 Scottish Budget. This will provide certainty on Scotland’s spending and tax choices, including the poundage, based on our progressive values. In doing so, I will give careful consideration to the points you have put to me in your letter.

John Swinney

Deputy First Minister

[Original letter published on Thursday 24th November]

Nineteen leading business representative groups and industry bodies have jointly written to the Scottish Government’s Deputy First Minister and Interim Finance Secretary asking him to freeze the business rate in the coming financial year.

The nineteen organisations represent a broad cross section of Scottish industry and commerce, including retailers, wholesalers, engineering manufacturing, tourism, hospitality and leisure.

The collective call comes ahead of the unveiling of the Scottish Government’s Budget on 15 December, which is expected to set the business rate and associated reliefs and thresholds for the 2023-24 financial year.

Scotland’s business rate is already at a 23-year high. Last week in the UK Government’s Autumn Statement the Chancellor of the Exchequer confirmed the business rate in England would not increase next April.

The joint letter from the business representative and trade bodies was submitted to John Swinney MSP, the Scottish Government’s Interim Finance Secretary, earlier this week. The text of the letter was:

Dear Deputy First Minister,

We are writing jointly ahead of the Scottish Budget to ask that you do not increase the poundage rate in the coming financial year.

We fully recognise that the Scottish Government, like business, is facing its own costs and inflationary pressures at the present time. We note too that headway has been made in recent years on broader aspects of rates reform including more frequent revaluations, the retention of the uniform business rate, and the pledge to restore parity on the higher property rate with England which should benefit 12,000 commercial premises here in Scotland.

Yet, after two turbulent years of the pandemic the fact is trading conditions remain challenging, the cost of doing business is spiralling, and the near-term economic outlook is weak. 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.

Yours sincerely,

David Lonsdale, Director, Scottish Retail Consortium

Sandy Begbie CBE, Chief Executive, Scottish Financial Enterprise

Tracy Black, Director, CBI Scotland

Dr Liz Cameron CBE, Chief Executive, Scottish Chambers of Commerce

Phil Clapp, Chief Executive, UK Cinema Association

Marc Crothall MBE, Chief Executive, Scottish Tourism Alliance

Huw Edwards, CEO, ukactive

Mark Kent, Chief Executive, Scotch Whisky Association

Sarah-Jane Laing, Chief Executive, Scottish Land & Estates

Warrick Malcolm, Director, ADS Scotland

Catherine McWilliam, Nations Director, IoD Scotland

David Melhuish, Director, Scottish Property Federation

Gordon Nelson, Scotland Director, Federation of Master Builders

Garry Richmond, Director, Print Scotland

Paul Sheerin, Chief Executive, Scottish Engineering

Alasdair Smith, Chief Executive, Scottish Bakers

Colin Smith, Chief Executive, Scottish Wholesale Association

David Thomson, Chief Executive, Food & Drink Federation Scotland

Leon Thompson, Executive Director, UKHospitality Scotland