Swinney resists calls for

THE revival of a scheme to cap business rate rises at 12.5 per cent a year would force small firms to subsidise the public sector and large companies to the tune of £77 million this year alone, the Scottish Government has claimed.

Finance Minister John Swinney is resisting calls from the Scottish Chambers of Commerce (SCC) to resurrect the system of "transitional relief" amid claims that a cap would place an unfair burden on SMEs.

The Government yesterday told members of the Chambers that 79 per cent of Scottish firms would feel no benefit or would be worse off if transitional relief were resurrected.

While a 12.5 per cent cap still exists south of the Border, Scotland recently scrapped it in favour of its own small business bonus scheme which, the Government argues, stops SMEs from subsidising public sector rate payers and the largest companies.

Swinney said: "To introduce a transitional relief scheme similar to England would have transferred almost 77m this year alone to the private sector to cushion rates increases for the public sector and a relatively small number of large businesses - hitting retailers, pubs and offices particularly hard."

Garry Clark, head of policy at the SCC, disputed the claim that SMEs had to subsidise larger firms and the public sector: "We had transitional relief schemes in Scotland for at least the last ten years and there have been no major problems."