Alex Salmond in plan to slash rates for business

The First Minister has asked officials to consider plans to cut business rates in Scotland to 10 per cent below levels in England by 2020.

But the leaked e-mail, which was sent from Mr Salmond's office on Wednesday evening, also shows he is considering a tax raid along with the tax cut, revealing plans to charge firms higher rates on empty buildings they own. Both reforms would have multi-million-pound consequences for Scottish business.

But the leak was dismissed by one business leader last night as a distraction, coming as businesses go head to head with Mr Salmond over his current plans for a controversial 30 million "Tesco tax", which would see big retailers forced to pay tens of thousands of pounds extra a year.

Labour claimed it showed that ministers were "desperately" searching for a way to win back the support of the business community after the Tesco tax row.

The e-mail, entitled "URGENT: Employment briefing request" was sent from Mr Salmond's office at 6pm on Wednesday to department heads in the Scottish Government.

It states: "The First Minister has requested urgent advice on the number of jobs a range of existing and potential policies will create over the period of the next parliament."

It then outlines the "potential policies" that ministers are considering for that term.

The first item is "a phased reduction over ten years in business rates poundage to 10 per cent below the English rate".

The second item is "reform of empty property relief, with the released revenue used to support job creation/training programmes".

Currently, businesses in Scotland pay no rates on empty properties for the first three months and then 50 per cent of rates thereafter.

Other potential ideas in the e-mail include a plan to help self-employed people to hire staff and a target of increasing Scottish exports by 50 per cent over the next six years.

The e-mail was leaked to Labour last night. The party claimed it showed that the SNP's plans for business were in chaos.

Finance spokesman Andy Kerr said: "The real concern is the chaos that it reveals at the heart of the SNP's economic policy. They are desperately searching for a way to win back support."

He added: "This e-mail reveals that their solution is to offer a cut in business rates that would take 200m out of council budgets, decimate services and cost thousands of jobs. Considering their track record, no Scottish business will fall for this.

"Much more worrying is the SNP's secret plan to end relief on empty properties.

Having failed to learn the lesson from their failure to consult with retailers over the supermarket tax, they now want to recover the cash from other struggling businesses."

However, the SNP said that the policies were not set in stone and were ideas ahead of a meeting Mr Salmond is holding with Deputy Prime Minister Nick Clegg next week on Scottish plans on the economy.

The business community offered a mixed response to the proposals. Iain MacMillan, the chief executive of CBI Scotland, said last night: "We are not going to comment on anything that is a leaked document. The business community is extremely sceptical of SNP promises with regard to business rates.

"Our immediate focus is to ensure that the supplementary levy on our retailing members is voted down by the parliament within the next week."

Colin Borland, of the Federation of Small Businesses in Scotland, said his members would welcome the business rates plans, but questioned if such a move was practical.

"It would be marvellous, but would it be realistic?" he said. "We are a bit sceptical about how it could be afforded and someone needs to do the numbers on it."

Mr Borland agreed that empty property relief should be examined. "Only around 2 per cent of our members benefit from this and we need a discussion on how much it is costing and who's getting the money."We don't want to be taking money away from hard-working guys, whose tenants suddenly go bust. However, you could argue that it is acting as a brake on economic development. In some cases it is not acting as any sort of incentive to get these empty properties used, so it is being counterproductive."

A spokesman for Mr Salmond said: "This relates to the joint ministerial committee meeting focusing on the economy in London next Wednesday, where the First Minister will make a presentation about the failing approach of the UK government, as well as focusing on the job-creating measures of the Scottish Government."

He added: "Under an SNP government, Scotland is the only nation in the UK experiencing rising employment and falling unemployment, and of course we consider job-creating suggestions from the business community all the time."

How the system works now

Non-domestic rates are a property based tax. They are based on the rateable value of a business property, multiplied by a poundage set by Scottish ministers, less any relief to which a ratepayer may be eligible.

The poundage rate for Scotland in 2010-11 is 40.7 pence. Larger businesses in 2010-11 - with a rateable value in excess of 35,000 - pay a poundage supplement of 0.7 pence, which contributes towards the cost of the Small Business Bonus Scheme.

The rates are collected centrally by the Scottish Government and then redistributed to councils.