The reduction and review of business rates is among the requests of the Aberdeen and Grampian Chamber of Commerce (AGCC) ahead of the Scottish Budget next week.
The chamber has written to the Finance Secretary with a series of requests, chief among them relating to the non-domestic rates paid by businesses.
“Up-front, local business property taxes, calculated on the basis of location and square footage as opposed to business performance and profitability, put many companies with the requirement for premises at a huge competitive disadvantage,” wrote chief executive Russell Borthwick.
He said brick-and-mortar businesses are left at a “competitive disadvantage” compared to online firms – pushed for relief for hospitality businesses to “ease immediate pressures” along with a reduction in the rates paid by those in the “most adversely affected sectors”.
But Borthwick also pushed for a longer term reform, stating: “We would like to see the UK and Scottish Governments taking a holistic review of business taxation to determine whether local business rates are stimulating or hindering productivity.
“The scope of this review could include consideration of whether a balanced system of local and online sales taxes would provide a fairer alternative to the out-of-date non-domestic rates regime.”
Elsewhere, the AGCC called for a “simplified” income tax system, adding that higher rates in Scotland compared to other parts of the UK was “making it harder to attract and retain senior talent”.
Borthwick also pushed for reform to the planning process for energy developments, the ramping up of the £500m Just Transition Fund, investment in infrastructure, housing arts and culture and higher education.
The recent decision to increase the employer contributions to National Insurance, he said, could have a “chilling effect” on charities offering services to the public sector.
Borthwick urged the Scottish Government to lobby Westminster “for an exemption from the NI increases for third sector organisations delivering essential public services and explore other ways to mitigate the impact on frontline services”.
A spokesman for the Scottish Government said: “The Scottish Budget will prioritise funding to deliver on the First Minister’s priorities, which include growing the economy.
“Concerns have been raised with the UK Government around the rise in employer NICs, which risks hampering economic growth.
“Ministers are committed to building as broad support as possible across Parliament in order to deliver the forthcoming budget.
“Engagement with all parties is ongoing ahead of the draft budget being set out in the Scottish Parliament on 4 December.”
(Image: Jeff J Mitchell/PA Wire)
John Swinney has warned that failing to pass a Budget bill would cause “a lot of disruption”, as he appealed to other political parties to work with him.
The First Minister said that if the Scottish Parliament does not agree on spending plans by 1 April then public services would not be properly funded.
This time round, the SNP will need to seek help from other political parties in order to get it over the line.
The Greens or the Liberal Democrats are thought to be the most likely potential partners, but so far it is not clear which party will be more amenable to Swinney’s proposals.
The SNP leader gave a speech at the Royal Society of Edinburgh on Wednesday morning, where he set out his vision for government, emphasising the need for collaboration and consensus in tackling the challenges facing Scotland.
Speaking to journalists afterwards, he was asked if he is engaging in the usual pre-budget “brinksmanship” or if he is genuinely concerned the government’s Bill would not pass.
“I’m simply saying that if we don’t have enough votes, we don’t have a Budget,“ he commented. “There’ll be a lot of disruption and on 1 April there will be no Budget plans in place that will afford public services at the level people expect.
“That’s the very real, practical difficulty that will be faced, and I want to avoid that.”
He also said he is ready to fight an early election if it became necessary – though this would not automatically take place if the budget Bill fails to pass.
The First Minister was also asked about the government’s longer-term financial picture.
Last week, the Institute for Fiscal Studies said that despite a boost from the Chancellor’s Budget there are tough fiscal choices ahead for ministers in Edinburgh and there will likely be little room for pre-election “goodies” ahead of the 2026 Holyrood vote.
He mentioned his own experience in managing public finances, saying: “We have balanced our budget, we’ve lived within our resources, we’ve delivered fiscal sustainability.
“So I appreciate that there’s lots of analysis and Excel spreadsheets and all the rest of it, but we’ve actually done it for 17 years.
“I kind of think that counts for something.”
During his speech, which was ostensibly billed as the First Minister “setting out his vision for Scotland”, Swinney pressed other parties for support in the Budget negotiations.
“In a Parliament of minorities, no political party is a mere bystander in the Budget process,” he said.
“More appropriately, they should be seen as partners, certainly that is how I have always seen them in my many years of negotiating budget Bills.
“Opposition for opposition’s sake is all well and good where governments have comfortable majorities, but put simply, in the Scottish Parliament today, if there is no collaboration, there is no Budget Bill.”
In a message to the other parties in Holyrood, he added: “We can choose to be mired in party politics, or we can choose to put first and foremost our duty to the people we represent.
“We can act with wisdom in the collective good, we can advance the prospects of the people of Scotland, but only if we are prepared to reach agreement to do so.”
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