Hospitality leader Stephen Montgomery used a hustings event to claim that soaring business rates are creating “tumbleweed” areas across Scotland.
Mr Montgomery, director of the Scottish Hospitality Group, reiterated calls for Holyrood to follow the example of the Northern Ireland assembly by temporarily halting a controversial revaluation which came into effect on Wednesday.
“Why can’t we halt the revaluation of rates right now?” he demanded as members of the 300-strong audience at RBS Gogarburn joined the calls for action to stop crippling rises of up to 500%.
“It needs changing before you lose more businesses,” said Mr Montgomery. “If we don’t have surviving businesses, you’re going to have no tax take whatsoever.
“My question really comes down to this – if we see the continuation of businesses closing, will the Scottish Government take the blame when there’s more unemployment, more high street shops and pubs shut, and we’re a tumbleweed area?”
He was speaking at a leaders’ panel organised by the CBI, IoD, FSB, Prosper and Scottish Chambers of Commerce
First Minister John Swinney, one of six party leaders at the event, responded that the hike in National Insurance Contributions – by the Labour government “had a greater impact than business rates”.
He said the government was providing a package of relief measures worth £900m to help businesses offset non-domestic rates.
His reply prompted a disdainful response from Reform UK leader Malcolm Offord who said it showed “the reality that very few politicians understand business, or have ever had to make payroll”.
He added: “Scotland is underperforming. We need policies that make the economy thrive.”
All the other party leaders called for a review of business rates which, according to a survey from the Scottish Chambers of Commerce this week, has risen up the list of concerns among businesses.
Labour leader Anas Sarwar said the reliefs offered by the Scottish Government “do not touch the sides, we need a pause”.
Green Party co-leader Ross Greer said the focus of reliefs should be on spin-outs. Alex Cole-Hamilton for the Liberal Democrats said: “You should not be disincentivised to refurbish your premises”, while Tory leader Russell Findlay said the rates system is “completely broken”.
Other trade groups, including the Scottish Retail Consortium, have called for the Scottish government to follow Northern Ireland’s example.
After the event, Mr Swinney refused to comment further. “I’ve said all I want to say on the matter,” he replied, when approached by Daily Business.
Mr Montgomery asked why many small businesses were not paying any rates while larger businesses were not getting relief. That was not encouraging businesses to invest and expand.
“John Swinney fudged the answer,” he said. “There is no incentive at the moment to grow from one unit to two or three.”
Marc Crothall, chief executive of the Scottish Tourism Alliance, added: “It is clear that business rates need to change quickly. The politicians need to understand the balance sheet of business.”
Michelle Ferguson, CBI Scotland director, said: “Whoever forms the next government must put forward a realistic, ambitious and deliverable plan to kick?start Scotland’s stalled economy and set the country back on a path to long?term, sustainable growth.
“Warm words in an election campaign are easy – delivery is what counts.
“We expect Scotland’s political leaders to commit to working in genuine partnership with business to drive investment, growth and competitiveness.
“The CBI stands ready to hold their feet to the fire to ensure that promises made to the business community during the campaign are delivered in full.”
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