Leaders warned Scotland risks becoming a ‘tumbleweed area’ over business rates

The leaders of Scotland’s six main political parties have warned the country risks becoming a “tumbleweed area” if business rates are not reformed.

First Minister John Swinney, Russell Findlay, Anas Sarwar, Ross Greer, Alex Cole-Hamilton and Malcolm Offord all appeared at a hustings event organised by the CBI on Thursday – the first such event of the election campaign.

The Scottish Government came in for heavy criticism over the business rates revaluation, which saw some firms face a substantial increase in costs from Wednesday.

Stephen Montgomery, the director of the Scottish Hospitality Group, urged a rethink at the event.

“One of our members, £111,000 rateable value, up to £675,000 payable,” he said.

“That is unaffordable.”

He added: “If we don’t have surviving businesses, you’re going to have no tax take whatsoever.”

The campaigner told the panel to return to the old valuations until the impact of the increases on some businesses could be understood.

“My question really comes down to this – if we see the continuation of businesses closing, will the Scottish Government take the blame when there’s more unemployment, more high street shops and pubs shut, and we’re a tumbleweed area?”

Mr Swinney – who has refused multiple calls to pause the revaluations but passed £900 million in rates relief through his Government’s budget earlier this year – said he recognised there will be firms who face “challenges”.

He added that businesses face more issues from policies such as the UK Government’s decision to increase national insurance contributions for employers, which he described as a “tax on jobs”.

Reform UK’s leader in Scotland, Malcolm Offord, said the situation with non-domestic rates was down to “politicians who say they understand business and they actually don’t”.

“There’s a breakdown here in the rhetoric between business friendly and actually seeing this happen in real life,” he said.

Scotland, he said, is “underperforming” and it was up to government to “put policies through that allow businesses to thrive”.

Scottish Labour leader Anas Sarwar said earlier the reliefs offered by the Scottish Government “do not touch the sides” as a result of the revaluations.

While Scottish Green co-leader Ross Greer said the country was “still not seeing the value” of business rates because of the level of relief offered by Government in recent years, as he pushed for firms that are spun out of universities to receive relief.

Scottish Lib Dem leader Alex Cole-Hamilton said rates should not be set by an “arbitrary assessment”, adding: “You should not be disincentivised to refurbish your premises, in the understanding that when those revaluations come around again, that’s going to be penalised against the value of your business.”

Scottish Tory leader Russell Findlay said the rates system is “completely broken”.

“You can fix rates in a heartbeat,” he said.

“The SNP Government has been listening to businesses, not least hospitality businesses – it could have paused the rates bill and given that respite, given them that breathing space.”