Scotland

John Swinney defends 23% business rate rise

money
Image caption The business rates bill will rise by £92m next year

The finance secretary has defended his plans for a 23% increase in business rates over the next three years.

In a letter to newspapers, John Swinney said more than half of this "apparent increase" is explained by inflation-linked hikes.

He argued this was in line with business rates increases in England.

He also said it ensures Scottish business rates - as a proportion of rateable value of business premises - will be no higher than in England.

The growth in the tax bill is boosted by the new levy planned for larger retailers of alcohol and tobacco, raising £40m annually by the end of the three-year planning period.

Clarifying details of the budget he announced at Holyrood on Wednesday, Mr Swinney said there would also be an end to rates relief on empty business premises, which he says will bring in £18m per year in each of the second and third years.

Analysis 'misleading'

The finance secretary claimed that the total revenue from rates rises through the cycle of revaluations, as appeals are processed, and those who lose them are moved to the higher level of payments.

Already raising more than £2.1bn each year, the business rates bill is to rise by £92m next year, with an increase of nearly 10% in 2014-15, meaning companies will have to pay £500m more that year.

Mr Swinney said the analysis of his business rates policy by the Centre for Public Policy for Regions at Glasgow University was "misleading".

He wrote: "It is simply wrong to suggest that the Scottish government is increasing costs for business in the way suggested.

"The Spending Review confirms the Scottish government's policy on business rates and reiterates our commitment that Scotland will remain the most competitive place to do business in the UK".

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