Derek Mackay told to make urgent statement on business rates

Finance secretary Derek Mackay. Picture: Andrew Cowan/Scottish Parliament

Finance Secretary Derek Mackay has been told to make an urgent parliamentary statement on business rates rises amid fears that many firms will go bust because of the increase.

The Scottish Conservatives warned that many businesses are “staring down the barrel of a gun”.

The Tories want Mr Mackay to face questions from MSPs on the revaluation of rates being carried out by the Scottish Assessors Association, amid warnings some firms unable to pay increased charges will refuse to do so.

Paul Waterson, chief executive of the Scottish Licensed Trade Association (SLTA), has warned the situation was his industry’s “poll tax moment”, in reference to Margaret Thatcher’s introduction of the community charge in Scotland in 1989, which many people refused to pay.

The Scottish Tourism Alliance has also written to First Minister Nicola Sturgeon urging her to intervene.

The changes are due to take effect on 1 April – before a Scottish Government review of the rates system led by former Royal Bank of Scotland chairman Ken Barclay reports is due to report.

Mr Waterston said there were people who would lose their businesses because they couldn’t afford the new rates, adding: “There are a lot of people who say they are not going to pay because they can’t.”

Tory leader Ruth Davidson has called for an urgent review of the revaluation.

She said: “This revaluation could see businesses across the country going under, it’s as simple as that. If that’s not cause for the SNP government to act, I don’t know what is.

“While Nicola Sturgeon obsesses with Brexit and independence, Scottish companies large and small are staring down the barrel of a gun.

“This revaluation is threatening jobs and the wider economy, and needs to be addressed as a matter of urgency.”

The party’s finance spokesman Murdo Fraser said: “This is fast becoming a crisis for businesses the length and breadth of the country. Many say they face closure, while others are being forced to hike their prices to cover these increased costs.

“This is not an acceptable state of affairs and we need to know what Scotland’s finance secretary intends to do about this.”

Scottish Labour economy spokesperson Jackie Baillie said: “Businesses are clearly losing confidence with the SNP government. Ministers have a duty to engage with the business community, and with parliament, about these changes.”

Under the forthcoming rates revision, 2015 property rental values are to be used to set rateable values for 2017. The values are then multiplied against a figure known as the poundage – now set at 46.6p in the pound.

The Scottish divisions of the British Hospitality Association said rates for hotels in Scotland have risen by an average of 92 per cent.

In the pub industry, an estimated 40 per cent of businesses has seen an increase in the rates bill, with some having a four-fold increase.