Business chiefs take job losses protest on rates to John Swinney

BUSINESS leaders from Scotland's three biggest cities will today confront finance secretary John Swinney over massive hikes in rates said to be threatening hundreds of firms and thousands of jobs.

Representatives of Edinburgh, Glasgow and Aberdeen will be attending crisis talks over new rates which have seen non-domestic business rates rise by as much as 99 per cent.

Companies complain that rates were re-assessed in April 2008, before the banking crisis, when many city centre rents were at an all-time high.

Hotels are said to have been particularly badly hit as their rates are calculated according to turnover at the time, rather than their rateable value.

The Scottish Government has faced growing anger for refusing to introduce a transitional relief scheme similar to one in England, claiming urgent action is needed to ensure a level playing field for businesses.

One of the worst affected hotels in Edinburgh is the award-winning Prestonfield House Hotel, which has seen a 99 per cent rise, and its business rate bill increase by 200,000, while the Glass House Hotel has seen an 87 per cent increase of 210,000.

In Aberdeen, where business leaders believe the increase has been 30 per cent on average, rates have rocketed from 220,000 to 450,000 at the Holiday Inn in the city centre.

Chamber of commerce leaders have been at loggerheads with the government since the beginning of April, when the new business rates took effect.

They claim 40 per cent of businesses across Scotland are worse off as a result of the revaluation. The government points out that this means bills had fallen or remained the same for 60 per cent of firms.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: "Make no mistake, where a small or even medium sized business has to find tens of thousands of pounds extra to pay their rates bill this year, the result could mean job losses, and it could even threaten the viability of the business itself.

"This year's rates rise comes at the worst possible time for many businesses – revealed to businesses just three or four weeks before bills were issued, leaving no time to plan and a high hurdle to overcome.

"To make matters worse, many of these businesses have been exposed to massive rates rises as a result of the Scottish Government's decision to abandon transitional relief.

"Such a scheme is continuing to operate in England, where businesses will pay no more than 12.5 per cent per year extra. When Scottish businesses are working hard to emerge from the longest and deepest recession in post-war history, this is an unacceptable position."

Graham Birse, deputy chief executive of Edinburgh Chamber of Commerce, said: "There has been no movement at all from the government on this since the spring, which is extremely disappointing. Businesses will go under unless there is some form of compromise."

A government spokesman said: "Introducing a transitional relief scheme similar to England would have transferred almost 77 million this year from the private sector to cushion rates increases for the public sector and a relatively small number of large businesses.

"Retailers, pubs and offices would have been hit particularly hard – something impossible to justify in this climate. We are focused on delivering economic recovery and believe the decisions we have taken are correct."