Leader comment: Cautious welcome for business rates change

Finance secretary Derek Mackay is to announce "further support for business and the Scottish economy".
Finance secretary Derek Mackay is to announce "further support for business and the Scottish economy".
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With less than six weeks to go before the new rateable values of Scotland’s businesses come into effect, there is still time for the Scottish Government to listen to the growing chorus of opposition. Misgivings over the increases in non-domestic rates have been voiced for several weeks now, with small companies in particular warning that they could go out of business.

But in recent days, the argument against the rises has intensified and gained momentum. Most damagingly for the SNP, they have emanated from the party’s supposed allies.

At the weekend, former first minister Alex Salmond conceded that some companies have a “very legitimate” case against the hikes, particularly in the north-east of the country.

Now, the pro-independence group, Business for Scotland, has joined the fray, with its chief executive, Gordon MacIntyre-Kemp, urging the government to intervene with a “robust set of rates relief measures” that will protect those firms hardest hit by the rate rises.

Such a step, he reasons, would be the best way of protecting jobs and promoting economic growth. It is an alluring argument by itself, but given it comes from a organisation that has traditionally shown nothing but support for the government, it becomes even more difficult for those in power to ignore.

Until yesterday, finance secretary Derek Mackay has repeatedly said he will not intervene to ease the impact of the increases, insisting any such scheme should be provided by local authorities. He of all people must have known that advocating such a measure was a cop out, given the straitened finances of Scotland’s councils, but some in local government called his bluff, with Aberdeenshire Council announcing a consultation on how to structure a relief scheme, while warning that any reductions will directly impact on the budget for frontline services.

This flurry of activity has perhaps inspired Mr Mackay to change tack. Today, we are told, he intends to outline a further package of support to help certain businesses “better deal with the impact of the forthcoming revaluation”.

The devil will be in the detail and the business community will no doubt wait and see what he has to propose before declaring victory. At the start of this month, it seemed inconceivable that the Scottish Government would consider a rethink, but if it cannot convince its own supporters that the new scheme is appropriate, it seems change or amendment is necessary.

It is encouraging that Mr Mackay at least appears to have taken notice of the criticism. He and the Scottish Government must surely realise that ploughing ahead in the face of such opposition would be an error.

To some extent, the government’s record on the Scottish economy can be explained by austerity and the general economic climate beyond these shores. But with the prospect of a devolved policy having a direct, negative effect on the country, there can be no excuses.