‘A kick in the teeth’: Business owners ‘incensed’ as bills double while parliament enjoy cuts to rates

FURIOUS business owners last night hit out at a massive rates reduction for the Scottish Parliament building – while their firms are hit with crippling rate hikes.

The Sunday Post can reveal the Holyrood parliament building will see its business rates bill reduced by £510,000 next year as part of a highly controversial shake-up critics are condemning as “a farce”.

Read more: The rates row: Winners and losers

But shops, companies and tourist attractions in the shadow of the building in Edinburgh will be hit with hefty rises in the business rates they must pay.

And some are facing a near-doubling of what they have to fork out, leading to fears that businesses which provide jobs and put money into the economy will go under.

Edinburgh Castle, Scotland’s flagship tourist attraction, is facing a 450% rise

Patrick Kavanagh is co-owner for the Leith Depot pub on Leith Walk – just a 20-minute walk from the parliament building. The pub, which only opened in November 2015, will see its rates bill soar by almost 100% – shooting up from £13,500 to £25,500.

A bewildered Mr Kavanagh said: “It’s a massive rise. It’s ridiculous. It’s got the potential of putting us out of business – that’s the reality of it. We are probably going to have to lose some full-time staff.”

Business leaders fear the tax revamp – which follows a review by independent assessors – will cost thousands of jobs across Scotland, forcing many small businesses and shops to close.

Read more: Q&A: What you need to know about business rates

Company owners facing huge rises – some up to 620% – want the Scottish Government to step in and freeze the current rate until a review on the system is finished later this year.

Paul Waterson, chief executive of the Scottish Licensed Trade Association, believes the nation’s already fragile pub economy will bear the brunt of the revaluation.

“There is no doubt it’s a scandal,” he said. “It’s an absolute farce.

“Our sector is the hardest-hit because of the way we’re being rated.”

He said it was “particularly galling” to see rates bills for public buildings going down sharply “when I’m fielding call after call from people telling me they’re going to have to shut because of this”.

Mr Waterson added: “It is incredibly unfair. A real kick in the teeth for businesses.”

Under the shake-up, the Scottish Parliament’s rateable value from April will be cut from £7,715,000 for 2016-17 to £6,960,000 for 2017-2018 – a reduction of nearly £800,000.

This means that the Parliament’s actual rates bill will fall from £3,934,650 in 2016-17 to £3,424,320 in 2017-18.

Other public buildings in Edinburgh are in line for a rates cut, too – including at St Andrew’s House and Transport Scotland’s headquarters in Victoria Quay.

The revelation that the Scottish Parliament’s rates are dropping will fuel the mounting political row about the revaluation – which former First Minister Alex Salmond yesterday waded into.

In remarks which will add to pressure on his successor Nicola Sturgeon to shelve the rises, Mr Salmond said affected businesses had a “very legitimate case”.

He said: “Of course there’s an argument against some of the rates rises and of course people are feeling the hard edge of it.

“In times like this we need our businesses to feel wanted, to be able to grow, to be able to survive and to be able to prosper in the future.”

He added there was “genuine concern where huge increases seem to be applied following a time of economics which was quite different from the reality that we are experiencing now”.

Mr Salmond’s intervention followed stinging criticism of the new rates from high-profile SNP member Stewart Spence, owner of the five-star Marcliffe Hotel in Aberdeen.

Mr Spence’s hotel is facing a 25% rise and he called for a nationwide boycott of the new rates, saying he would refuse to pay any increases.

And Mr Spence directly criticised SNP finance secretary Derek Mackay – saying his predecessor John Swinney would have taken a different approach – and called for Ms Sturgeon to take action.

He said: “Nicola’s gone very quiet on the whole thing. I would rather she got involved.

“John Swinney would have discussed this with us. He would always ask people their opinions, whereas the current finance minister just isn’t interested in speaking to anyone.”

Scottish Conservative finance spokesman Murdo Fraser said Derek Mackay had spent the last few weeks insisting nothing needed to be done on the business rates rises.

He said: “Now Alex Salmond says there is a legitimate case for action.

“If Derek Mackay won’t listen to thousands of affected firms, perhaps he will listen to his former boss.”

Meanwhile, an alliance of concerned business chiefs will this week press Mr Mackay to take action. Glasgow Chamber of Commerce, the Scottish Tourism Association, Scottish Licensed Trade Association, Glasgow Restaurant Association and the chairman of the Glasgow Licensing Forum have all joined forces to call for the proposed changes to business rates to be scrapped.

The Glasgow Chamber of Commerce’s chief executive, Stuart Patrick, said: “All we are asking for is a level playing field which doesn’t pose further challenges for such an important industry.”

A Scottish Government spokesman said: “The valuation of business properties is undertaken by independent assessors, funded by local councils, not the Scottish Government. Each council retains all the business rates revenue it collects, and it is for councils to apply rates reductions, on top of existing statutory reliefs, as they see fit.”

** This article was changed on February 23 2017 to amend the figure for the drop in the Scottish Parliament’s rates bill caused by the reduction in its rateable value.