Tories want rates relief maintained

Sep 6 2012

Legislation to slash rates relief for empty business properties should be abandoned before it does lasting damage, according to the Tories.

The proposals, which ministers claim will help bring vacant premises back into use, are "fundamentally flawed" and would cost businesses millions, Conservative Margaret Mitchell told the Scottish Government.

Companies can get a 50% discount on rates for their empty units. The Scottish Government wants to reduce this to 10%. Business lobby group CBI Scotland said the change is a "tax on distress" because firms face "the prospect of having to pay increased charges for buildings that are not earning them any money".

Ms Mitchell claimed the proposed reduction in non-domestic rates relief - part of the Local Government Finance (Unoccupied Properties etc.) (Scotland) Bill - would "cost businesses millions of pounds each year and affect thousands of properties".

The Tory MSP said: "This is a fundamentally flawed Bill because it is on a false premise, namely that commercial property is empty through choice. The underlying reason for empty commercial properties is the lack of demand in the current economic climate.

"By increasing the potential liabilities for those considering taking on unoccupied properties, the SNP is effectively smothering any prospect of attracting speculative development." She added: "This is the wrong Bill at the wrong time and should be abandoned before any lasting damage is done."

Labour's Sarah Boyack said: "It's clear there is support for the ambition of bringing empty properties back into use but there are deep worries that some of the elements in this Bill will make matters worse."

Liberal Democrat housing spokesman Jim Hume said: "We don't agree that taxing businesses more is going to do anything to help regenerate our town centres. Far from providing an incentive to bring empty properties back into use, the Bill will hammer businesses already struggling to survive. The Scottish Government wants to hammer businesses with high taxes when it should be helping them to recover and grow."

Local Government Minister Derek Mackay said the SNP administration would make some minor changes to the legislation. He said the rates relief reduction will create "modest but necessary savings" of £18 million a year from 2013-14.

He said: "The package of rates relief will remain the most generous in the United Kingdom. I commit to further engagement, hope Parliament considers our amendments at stage two and, in essence, supports these key measures to bring the empty properties that blight our communities, domestic and non-domestic, back into use."