Scottish Parliament earlier this week gave local authorities the power to set their own business rates and as such a free reign to charge local businesses in Scotland as they see fit. With local authority budgets across Scotland being called upon to satisfy so many needs and wants, the decisions on business rates could be seen by some local authorities as a way to raise funds and ease the burden of demands.
This is a temptation that many will choose, and some will be forced into, and the short term benefits of increased business rates could lead to the decline or even demise of high streets already facing challenging times. So, any short term benefits paid for by businesses on Scottish high streets would be not only damaging to those businesses, would also come back to bite harder on Scottish local authorities. Once businesses have left the high street replacing them is far more difficult as the collective value of the location has diminished.
Responding to Wednesday’s vote in the Scottish Parliament to give local authorities powers to set business rates levels, Kate Nicholls, CEO of UKHospitality has responded telling us: “Business rates are already a scourge for High Street businesses across Scotland, directly leading to business closures and the erosion of local communities. Hospitality is the hardest hit sector and any increases will hit Scotland’s pubs, hotels and restaurants the hardest.
“Devolving powers to local authorities, who are desperate for any extra tax revenue, is wrong-headed and will inevitably lead to higher costs for local businesses.
“The intention of the Barclay Review was to make the system fairer and more consistent. This amendment flies in the face of those objectives. Scottish Parliamentarians should be looking at ways to support business as a creator of jobs through cutting punitive business rates, rather than saddling them with even more cost and complexity.
“We urge everyone involved to work to overturn this amendment and concentrate on reducing the burden of tax on Scotland’s hospitality businesses.”
We would have to agree with Nicholls and back all efforts of reducing the burden of tax on Scotland’s hospitality businesses, not increasing it.