Subordinate Legislation
Non-Domestic Rates (Levying) (Scotland) (No 2) Regulations 2012 (SSI 2012/29)
Agenda item 2 is an oral evidence-taking session with the Minister for Local Government and Planning, Derek Mackay, and Government officials on the Non-Domestic Rates (Levying) (Scotland) (No 2) Regulations 2012, which is a negative instrument. A motion to annul the regulations, which has been lodged by Margaret Mitchell, will be considered formally immediately after the evidence-taking session.
Members have a copy of the regulations and a paper that sets out their purpose. The Subordinate Legislation Committee had no comments to make on them.
I welcome the minister; Marianne Cook, who is policy manager in the Scottish Government’s local government finance unit; and Colin Brown, who is senior principal legal officer in the Scottish Government’s legal services directorate.
I invite the minister to make opening remarks on the regulations.
Thank you, convener.
In preparing our budget, the Government faced tough decisions on how to fund the public services that are vital to Scotland. There is consensus in the Parliament that increased preventative spending is the key to the sustainability of our public services and the improvement of outcomes, so the Government decided that it seemed reasonable to boost preventative spending with additional resources wherever we can. Therefore, it proposed the introduction of the public health supplement as an income-raising measure to boost preventative spending, to come into force in April 2012 for only the very largest retail properties that sell both alcohol and tobacco.
It is important to put the measure into a wider context. Scotland is not alone in this respect: a large retail supplement has been introduced in Northern Ireland. Only around 240 retail premises—or 0.1 per cent of all business premises—in Scotland will pay more. That should be contrasted with the 63 per cent of Scottish retail premises—well over 30,000 shops—that currently pay zero or reduced business rates as part of the most generous relief package in the United Kingdom.
Since we published our proposals, ministers have held constructive discussions with retailers and business organisations, and have reflected on the points that have been raised. Mr Swinney confirmed to Parliament that
“within the constraints of delivering a balanced budget, I will reduce the amount that is paid by individual retailers and limit the length of time that the supplement will apply to the next three years.”—[Official Report, 8 February 2012; c 6153.]
That is the overall effect. The income that is generated by the public health supplement will reduce by an estimated £15 million over the three-year period to 2015. That reduction will be offset in full by the income that is generated through our matching the English large business supplement.
Members have heard arguments that retailers will be deterred from investing in Scotland as a result of the public health supplement. On the basis of recent evidence, that is simply not the case. On 23 January this year, Asda announced plans to invest in a replacement depot and open four new stores in Scotland. That is a perfect illustration that the impact of the new supplement will be relatively small and that it will not discourage large retailers from investing here.
Scotland remains the most competitive place in the UK in which to do business. We announced that we would maintain the small business bonus for the lifetime of this session of Parliament and that the thresholds for 2012-13 would be maintained at 2010-11 levels. The scheme benefits two in every five commercial premises and it will continue to benefit small and medium-sized businesses. The scheme is just part of a relief package that is worth more than £500 million every year and which benefits many sectors, including around 63 per cent of all Scottish retail premises, which pay zero or reduced business rates. In addition, all businesses will be able to benefit from the creation of the deferral scheme that we announced in December, which will provide flexibility to businesses by allowing them to spread the normal retail prices index-linked inflationary increase for 2012-13 over three years.
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Preventative spend was a major focus of the Finance Committee’s work. We sought new resources and the public health supplement is a new resource. I ask members to walk the walk in securing the resources to make preventative spending happen. If you believe—as we all say we do—that preventative spending is a necessity and that new revenue is critical, opponents of the public health supplement have a duty to say where they would find new funding streams. If not here, where?
I thank the minister for his opening remarks. We will now have questions from members.
Why has the Scottish Government not carried out a business and regulatory impact assessment on the impact on the Scottish retail sector of a tax that will, as the minister stated, raise some £95 million over the next three years, given that a business and regulatory impact assessment was carried out on smaller tax takes?
Clearly, some specialisms may require deeper analysis, but for the public health supplement we should bear it in mind that proportionality suggests that a business and regulatory impact assessment is not required. Business rates account for 2 per cent of turnover in the retail sector, and even with the public health levy the figure would be only 2.3 per cent. We must keep the change in context. We can also look at the profit margin, if you are interested in impacts. The profit margin of the big four retailers, which generate a turnover of £90 billion, would fall by 0.5 per cent as a result of the public health levy. That is some of the analysis of the policy’s potential impact.
I will address that later, but it was useful to have your explanation.
The charge is billed as a public health levy, but there seems to be no direct evidence that it will have the stated effect. What precisely will the levy be spent on once it is collected? Will you comment on the lack of evidence and on what the levy will be spent on? In addition, why was there no mention of the levy in the Scottish National Party manifesto?
The £90 million that it is estimated will be generated through the supplement will contribute to the Government’s preventative spend agenda, which totals over £500 million for three years; those funds will be delivered in partnership with the national health service and local authorities. At this stage, I cannot give a line-by-line account of how each penny and pound will be spent. However, every pound will be spent on preventative spend over the three-year period. The money that we will contribute from the supplement will be targeted at that spend. A range of preventative measures has been delivered, and as we roll out the change funds, which are still subject to on-going discussion but will be in place for the new financial year, we will ensure that every penny of the supplement is spent on preventative spend.
Margaret Mitchell is right that the tax in itself will not necessarily change consumption or individual behaviours around alcohol or tobacco. The policy is different from minimum pricing, which we believe will have a clear impact on consumption. The new tax is about income generation that will fund preventative work and will therefore have a seismic effect that will change and improve how we do business as a Government. The committee has discussed some of that this morning—for example, the importance of community planning and the difference that change funds can make in turning around some of the difficulties that our society faces.
The tax should deliver change, and we can describe how the money is being spent by all the partners who will work together on the preventative spend agenda.
To be quite clear, there is no guarantee that the money that is raised from the levy will be spent specifically on preventative spend on health issues.
No. All the funds will contribute to the over £500 million. As you will be aware, a large part of that sum is the early years fund, but there is also the older people’s fund and there will be an element for money to address reoffending. However, for very good reasons, the lion’s share is for work on early years.
To try to extrapolate how any individual tax take is spent on any individual project would be incredibly difficult, because we are bringing together local government finance, health finance and—this is really important—the revenue from the new levy. As we have discussed before, adding to existing spend to help our services deal with their current pressures is incredibly difficult. That is why a new revenue stream is essential.
What about my question on why the measure was not in the manifesto?
The manifesto said that, in government, our party would make great strides on the preventative agenda. I think that spending £500 million on that agenda is pretty impressive. I recall that the Labour MP Graham Allen came to Scotland to present evidence to a committee here. He was tasked by the UK Prime Minister to find, I think, £5 million, and if he did so, the Prime Minister was to give him another £5 million for preventative spend. Here in Scotland, we have targeted £500 million at preventative spend, which shows that we take the agenda seriously.
How can a tax grab on some of Scotland’s largest employers help economic recovery and combat unemployment, notably youth unemployment?
The member is well aware that the knowledge that the supplement was being created has not deterred retailers from making new investments in Scotland. There have been announcements on the creation of extra employment in the country. The proof of the pudding is in the eating. Investment in Scotland is on-going, and it does not involve only the four Asda stores that I mentioned. We must address some of the difficulties in our society so that we have a workforce that is fit for the future, which is why preventative spend is particularly important.
To put the measure in the context of the overall economy, a £90 million contribution over three years pales into insignificance compared with some of the UK Government’s decisions on the economy, including the VAT rise and the raid on oil and gas revenues, which have affected our economy to the tune of billions of pounds, not £90 million. We have targeted that money at creating a better Scotland.
On the point about a tax grab, the UK Government’s decision to increase VAT is estimated to have removed about £1 billion from the Scottish economy. Is the minister aware of any detailed business and regulatory impact assessment that was carried out for that tax change in Scotland? Will the minister comment on the absence of the intention to raise VAT from the Conservative and Liberal Democrat—the coalition parties’—manifestos?
That is perhaps a matter for Margaret Mitchell to address. I am not aware of any impact analysis or whether one has been published or what it contained. However, clearly, from the numbers that are involved, we know that the VAT rise will have a greater impact than the supplement. I should correct the figure that I gave—we estimate that £95 million, not £90 million, will be generated through the health levy.
I have a similar question on last year’s budget and the impact of the oil taxation changes on Scotland’s economy, particularly the economy in the north-east of Scotland. The measure has created uncertainty in our country. Was any impact assessment done by the coalition Government on that one?
I am not aware of any assessment, although I am aware of the First Minister’s comments on how damaging the measure would be to the sector, jobs and the prospects for future exploration, and on the overall impact on Scotland’s economy. To put the issue in context once again, the public health supplement pales into insignificance when compared with the decisions that the UK Government has taken, which will impact on employment and, crucially, future investment. The evidence that we have so far is that investment in retail in Scotland will continue when the supplement is introduced.
As the budget has been agreed, it would be wrong of us to oppose the measure and remove £30 million from the Government’s finances. Therefore, we will have to support the measure. However, we are extremely disappointed that an impact assessment has not been carried out and that there has been no consultation on the impact on businesses and employment. The Government has not set out whether the money that will be collected by local authorities will be ring fenced to help local authorities or will go to other initiatives.
Why is there such urgency to get the regulations passed? The Cabinet Secretary for Finance, Employment and Sustainable Growth stated in a written answer to Tavish Scott:
“The Scottish Government has no proposals to bring forward a proposal for a large retail supplement to business rates.”—[Official Report, Written Answers, 14 June 2011; S4W-577.]
I will address your last point first. The Scottish Government must adapt to changing circumstances, including a reduced UK budget and the effect that that is forecast to have in Scotland. We must match the resources that are available within the current Scottish block and the funding restrictions with the aspirations that we have as a country, as a Parliament and as a Government.
You more than most, Mr Pentland, given your time on the Finance Committee, are well aware of the importance of preventative spend. You asked whether the money will be ring fenced for local government; the answer is no. It will be ring fenced for, directed towards, contribute to and fund preventative spend across the country in partnership with the other funds that are available. It is important that we deliver on that aspiration.
Circumstances change, as does the UK Government’s settlement for Scotland. The challenges that the country faces will change and the economy will change. The position has moved on and the Cabinet Secretary for Finance, Employment and Sustainable Growth has listened to the comments from the retail sector and others; that is why changes were made. It has been agreed that the supplement will be a temporary measure over three years and the overall take has been reduced. We have been able to show that, as a Government, we have listened and responded to the concerns that have been raised.
You mentioned employment numbers. You should bear in mind the figures that I quoted earlier: £90 billion is generated in turnover by the sector and the supplement will be a 0.5 per cent reduction in the companies’ profits, which will help to fund essential work.
We have been told that the measure might make Scotland less competitive. It is interesting to hear that Asda still plans to build four new stores and that other large retailers still plan to invest in Scotland. In any conversations that the Scottish Government has had with those companies, have they explained why they are still keen to invest in Scotland? Have they suggested that it is because they will still be able to make profits from their stores?
Absolutely. The private sector will assess the health of the market, and the market in Scotland is clearly still very strong. There are great job opportunities and opportunities for growth as well. Although we may disagree about the figures, Scotland has been outperforming Great Britain in retail growth, raising it to quite a high level. Scotland is still a good place to do business.
Government policy has been to match the English rate poundage, and we have the most competitive rates in the United Kingdom. Ensuring that our high streets are largely protected with a package of reliefs that amounts to more than £500 million, including the small business bonus, has made a difference and has preserved many jobs. If we had not had those policies, those jobs may have been lost.
You mentioned the oil and gas levy. Is the Scottish Government not guilty of double standards? The First Minister said that changes in business taxation should be subject to a year’s statutory consultation before implementation. The imposition on business of a supplement of £110 million originally—now £95 million—is a very big change.
You must put the matter into perspective. The scale of the oil and gas raid on Scotland’s economy is £2 billion, whereas the impact of our policy is £95 million. You must keep the matter in perspective and be proportionate in your analysis. If we were an independent country, we would have access to those resources and could consider how to use all the various economic levers in our taxation policy, instead of being left with the few levers that we have.
I will bear in mind that the First Minister does not consider £95 million to be a substantial amount. It is good to have that on the record.
Some supermarkets and large businesses are still talking about investment, but the levy has not yet been implemented. In other words, this very negative message to investors has not yet been sent out because the levy has not yet been set. How should the large retailers find the extra finance? Should it come from consumers, suppliers or shareholders?
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It is not for me or the Scottish Government to set out how companies choose to pay the levy. Some would argue that it should be funded by profits rather than anything else. Many committee members, including you, have commented on supermarket profits so I suggest that companies need to look to their profits.
I have more faith than you in the companies’ ability to plan ahead and forecast how tax changes and economic policies will affect them. It is ridiculous to suggest that, because the tax has not yet been implemented, the companies have not considered it. They will have planned ahead and considered it in any business case that they have produced.
Given the Scottish Government’s position, the regulations will, in all likelihood, be agreed to. Businesses will have been preparing for that and it is wrong to suggest that there is some doubt over whether the policy will be implemented. The companies will have been forecasting, planning and producing business cases that will mean new investment for Scotland in the knowledge that the policy will be implemented.
The profits that are made by the big four supermarkets that have been mentioned come, by and large, from outwith Scotland, so when they have the opportunity to choose where to locate, the levy will be very much a disincentive. Does the minister acknowledge that?
Would not a good Scottish Conservative think that it is a good idea that Scotland’s Parliament can raise resources without necessarily taxing economic activity in Scotland? Overall, the profit margins of the big four companies that you have mentioned will be reduced by a fraction of a per cent from 5 to 4.5 per cent. That needs to be kept in perspective.
You are probably aware that Scottish Labour supported the social responsibility levy, which is to apply to all businesses that sell alcohol. We are unclear about how that fits in with the public health levy.
That is a fair point. Scottish Labour in local government also made the point that implementation of the social responsibility levy should be phased and slowed in consideration of the impact that it might have on some. That makes a point about the proposed public health supplement. To be required to pay the supplement, a business will have to have a rateable value of more than £300,000, be selling alcohol and tobacco, and not be eligible for any other relief. The social responsibility levy is much wider than that and there is an argument that now is not the time to implement it.
It would be difficult to implement both levies simultaneously and to ensure that we do not harm the local economy in any way. That point has been made by John Pentland’s colleagues across the board in local government, who will have to implement the social responsibility levy at the local level. There is a fair and valid point about implementing both levies simultaneously, but the public health levy is far more targeted and focused on larger centres that have a much greater rateable value as opposed to the other premises that might be affected by the social responsibility levy.
I have one final question, minister. Again it is about the double standard.
The Cabinet Secretary for Finance, Employment and Sustainable Growth talked about the previous coalition’s policy on business rates, which saw Scotland’s firms at a competitive disadvantage for seven years until 2007. They had to pay 10 per cent more than the non-domestic rates in England before the introduction of the unified business rate, and now the Scottish Government is advocating that large retailers in Scotland should pay 20 per cent more than they would in England over the three years. Is that not double standards?
If I were Margaret Mitchell, I would think hard about making accusations of double standards. It is probably only a matter of time before the Conservatives in England adopt minimum pricing and the public health levy. She should be mindful of that before accusing us of double standards.
We still provide the most generous package of reliefs. We have matched the poundage in England and made Scotland the most competitive place to do business in the United Kingdom in terms of business rates.
We are choosing to do some things differently and to target revenue generation at large retail premises as opposed to all premises throughout the country for very good reasons, such as preserving the high street and supporting small and medium-sized enterprises.
The balance of the package is right. Scotland remains on a strong competitive footing.
There are no further questions, so I thank the minister for his evidence.
We move to item 3, which is the debate on the motion to recommend annulment of the regulations, on which we have just taken oral evidence. I remind the witnesses that only elected members may take part in the debate and I invite Margaret Mitchell to speak to and move motion S4M-02155.
I thank the Confederation of British Industry, the Scottish Retail Consortium and the Scottish Property Federation for supplying at short notice written evidence in support of my motion.
I welcome the opportunity to speak to the motion, which I lodged for the following reasons. The proposed levy is at odds with the Scottish Government’s stated objective of delivering
“A competitive tax regime which incentivises business growth”.
Instead, the £95 million levy would make it more expensive for retailers to invest in Scotland, so it would put at risk much-needed investment from, for example, large chain stores, which can choose where is best to locate.
The introduction of the levy contradicts the Scottish Government’s stated aim of ensuring that
“Scotland is the most attractive place for doing business in Europe”.
It marks the departure from the unified business rate and poundage rate parity with the rest of the UK. That, in turn, means that the affected retailers will pay the highest poundage rate to be set in Britain for more than 20 years.
The retail tax has been presented as a public health levy, but there is no objective evidence to support that description or to justify the decision to target some large retailers as a means of reducing alcohol and tobacco consumption. In the absence of that evidence, the levy is simply a tax on a handful of companies that the Scottish Government believes can afford it.
The minister argued that the levy will raise only the equivalent of 0.1 per cent of retail turnover in Scotland, but turnover is not profit and profit is what drives investors. That fact was borne out in December, when the Centre for Economics and Business Research gave the Cabinet Secretary for Finance, Employment and Sustainable Growth clear evidence that the levy amounts to 8 to 10 per cent of the profit of the estimated 240 stores in Scotland that will be liable to pay it.
Even with the decrease of £15 million in levy income over the three years, we are still looking at approximately 8 per cent of profit. That will certainly affect investment decisions, job creation and the retail sector. Despite that, the Scottish Government has refused to carry out a business and regulatory impact assessment. That refusal contradicts best practice guidance and the recommendations of the Scottish Government’s own regulatory advisory group.
The absence of a BRIA means that a full and proper assessment of the levy’s wider implications has not been undertaken to establish, for example, its potential negative impact on the construction sector, the store fitting sector or employment; the implications for business improvement districts; or the potential for jobs to be ceded to online retailers that are based outwith Scotland, resulting in lower tax revenues and/or additional complexity in the non-domestic rates system, which would have associated costs.
It is ironic that the SNP Government, which continues to argue for more powers—for example, over corporation tax—to boost economic growth, should decide to use the powers that it already has over business rates to introduce a regressive tax that endangers investment and job creation in Scotland, especially as 59 per cent of retail jobs in Scotland are part time. Flexible working attracts young people and particularly women. Sixty-two per cent of the retail workforce is female, and such jobs are often second incomes to boost household incomes—additional spending power that benefits other local businesses. A third of retail employees are aged 25 or under, and many young people get their first foothold on the employment ladder in retail.
It makes no sense to put those jobs in jeopardy by introducing the retail levy, especially when the youth unemployment figure in Scotland is now more than 100,000. Given all that, it is no surprise that the levy has been opposed by a wide range of organisations, including the Scottish Property Federation, the Union of Shop, Distributive and Allied Workers, the Wine and Spirit Trade Association, the Scottish Retail Consortium, the CBI, the Scottish Chambers of Commerce, the Scottish Council for Development and Industry and the British Council of Shopping Centres.
I urge members to think again and to vote in favour of the motion. In the event of a tie, I urge the convener to support the status quo because, in the interests of transparency and accountability, a decision of this magnitude deserves to be debated in the chamber with the full involvement of all parties.
I move,
That the Local Government and Regeneration Committee recommends that the Non-Domestic Rates (Levying) (Scotland) (No.2) Regulations 2012 (SSI 2012/29) be annulled.
I thank the member. I will give reasons for using any casting vote if required.
To avoid repeating myself I will not go through every point again, but I will make some comments.
First, on the point about debating the issue in Parliament, the budget for Scotland was debated by Parliament, and the proposal was a key part of the budget. Some people were silent then and are silent now on the question of which form of revenue generation should be used, if not this one. It seems sensible to use the levy to fund preventative spend. There are guarantees that it will contribute to the £500 million step change in how we do business as a public sector that works with others to achieve change in our country.
It has been said in the past, although not today, that this is a Scotland-only tax. I make the point again that Northern Ireland is developing a public health levy.
The Scottish levy involves a fraction of the profits of the large companies. The proof of the pudding is in the eating. The take would come from 240 of 217,000 commercial premises—0.1 per cent of non-domestic premises in Scotland. It is reasonable to put that into perspective.
Of the companies affected, most are still announcing job creation and new investments in Scotland, which suggests that the policy will not have the impact that some suggest. On the whole, the levy is an important revenue-generation measure, which will impact on preventative spend and public health.
I remind Margaret Mitchell that under the Conservatives, for a consistent period of more than 17 years, business rates in Scotland were higher than those enjoyed by England. Our performance has been to ensure that Scotland remains a competitive place in which to do business in the United Kingdom. I urge members to support the budget line because, apart from the fact that it is good and sound, no one has suggested any other measure to fund preventative spend, which every member of Parliament professes to support.
12:30
We move to the open debate. I remind members that, under rule 10.6.3 of standing orders, it can last for a maximum of 90 minutes. A number of members have indicated that they would like to speak. I will kick off, but I will not make a lengthy speech. The issue has been debated extensively in the chamber, where the arguments were well made.
I have three main points. First, during difficult times such as those in which we find ourselves, it is appropriate that those with the broadest shoulders, such as the larger supermarkets in Scotland, bear a little bit more of the burden. Those supermarkets are among the few organisations that have managed to continue in profit, irrespective of the pressures facing hard-pressed citizens in Scotland.
Secondly, and in contrast, the UK Government’s increase in VAT has not just affected every business in Scotland but impacted directly on individuals’ living standards. It is taking money out of the pockets of every single citizen in Scotland, which is the exact opposite of what the Scottish Government is doing via provisions such as the council tax freeze, which most members of this Parliament support.
Thirdly, in the context of the £1.3 billion cut to Scotland’s budget and the £1 billion removed from Scotland’s economy by the VAT increase, £25 million may not seem a huge amount of money, but the Scottish Government’s intention to specifically target that relatively small amount towards preventative spending for health means that it could have a big impact on Scotland’s health in the future. It is the right thing to do and I will certainly support the minister later today.
I, too, am in favour of the Government’s position. Margaret Mitchell reiterated her view that the proposal puts investment in Scotland at risk and that it will make Scotland a less competitive place to do business, but we have heard evidence to the contrary. Companies are still investing in Scotland.
In response to a point that Margaret Mitchell made during the evidence session, I am entirely unconvinced that companies do not factor in changes to the taxation base in every part of the world in which they do business. I emphasise my reference to the world, because an insidious suggestion has been made that the companies under discussion do not make profits in Scotland.
The Scottish Property Federation’s briefing argues—Margaret Mitchell picked up on this point—that the companies’ profits
“largely come from outside Scotland.”
They are, self-evidently, multinational companies, so I am sure that that is true, but it suggests that they do not make a profit in Scotland, when they clearly do. They would not invest in Scotland if they did not think that they could make a profit. Moreover, they will continue to invest, because they can make a profit.
That leads to another point made by Margaret Mitchell, which was that the companies will choose where to base themselves. Frankly, I say with the best will in the world that that is nonsense. If they want to make money in Scotland—the companies are designed to make a profit—they will have to be based here. If they want to make money out of my constituents in Cumbernauld, they will have to be based in Cumbernauld. I say to Margaret Mitchell that my constituents will not travel from Cumbernauld to Cumbria to get their messages. The companies will continue to be based here in Scotland.
To return to the convener’s point, it is entirely correct that the companies under discussion bear the largest burden. It is disingenuous to refer to the levy as a tax raid—it is entirely proportionate—and as regressive because, by its very nature, it is progressive. It is right that we ask the companies to bear a little more of the burden in meeting the challenge of preventative spending, particularly given the challenges that we face in Scotland. I do not support Margaret Mitchell’s position.
As I said in the evidence session, my whole concern has been about the process. For the record, I say that we are extremely disappointed and concerned that the Scottish Government has shifted dramatically from its own best practice on regulation and that we regret that it has failed to carry out a statutory consultation and an impact assessment on the tax. However, as the budget has been passed, we reluctantly support the measure, because it would be wrong to leave a £30 million hole in the Government’s finances.
It really annoys me when Opposition parties, wherever they may be, try to change budgets without saying where moneys will come from. Aberdeen City Council’s standing orders state that no one can change anything unless they say where the money will come from; perhaps the Parliament should look at its own standing orders. It is far too easy for folk to say, “Get rid of this,” without saying what they would do instead. John Pentland says that the budget has already been passed and that he will support the minister, and I respect that honourable position.
The proposal is certainly not putting large retailers off investing around the country. I could give Margaret Mitchell a number of examples from my city, where large retailers are scrambling about for sites and trying to get planning permission. They have not been put off one iota. We hear constantly about the new jobs created by large retailers. I am not entirely convinced that new superstores always bring with them new opportunities and do not simply shift employment from some areas to others, but I will not go into that today.
We are seeing double standards from Margaret Mitchell and the Scottish Conservatives. I come from the north-east of Scotland, and the huge impact there of last year’s oil taxation changes has been incredible. Those folk have a choice to move their business elsewhere in the world. As Jamie Hepburn rightly pointed out, no one will go from Cumbernauld to Cumbria for their messages, but it is easy for the big oil companies to shift their investment from Scotland to west Africa or Kazakhstan. What is being done here today is hypocritical. I fully support the minister and the Government.
I find Kevin Stewart’s comments absolutely astounding. Thank goodness we still have the right to freedom of speech in this country. In Mr Stewart’s world, it seems that any alternative view or opposition to Government policy should be crushed. Although we now have a majority SNP Government and no checks and balances, an alternative view can still be presented, even in this committee, with its SNP majority.
On Mr Stewart’s point about funding, the Barnett consequentials would more than deal with that. Changing the prescription charges policy to move from a universal benefit to targeting those in need would more than pay for the levy in the first year.
No other member has brought up anything that was not covered in my reasons for lodging the motion to annul. The minister has said nothing that changes my belief that this is an anti-competitive tax, which will raise £95 million, nor has he assuaged my fear that it will endanger jobs and investment in Scotland.
The tax sets a worrying precedent and sends out the message, “If you make profits, we don’t really mind if we put you at a competitive disadvantage compared with England by making your business rates higher.” That is certainly not the message that the Scottish Government said that it wanted to send out. It is doing the opposite of preventative spend and potentially putting at risk jobs, particularly those of women and young people. For all those reasons, I remain committed to pressing my motion to annul.
The question is, that motion S4M-02155 be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Mitchell, Margaret (Central Scotland) (Con)
Against
FitzPatrick, Joe (Dundee City West) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
McTaggart, Anne (Glasgow) (Lab)
Pentland, John (Motherwell and Wishaw) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
The result of the division is: For 1, Against 5, Abstentions 0.
Motion disagreed to.
12:42
Meeting suspended.
12:42 On resuming—
Non-Domestic Rate (Scotland) Order 2012 (SSI 2012/27)
Non-Domestic Rates (Levying) (Scotland) Regulations 2012 (SSI 2012/28)
Item 4 is consideration of two negative instruments that give effect to the new poundage rate for non-domestic rates for the financial year 2013-14 and to the provision of the Government’s small business bonus scheme in that year. The Subordinate Legislation Committee had no comments to make on either instrument. As members have no comments and no motion to annul either instrument has been lodged, does the committee agree that it has no recommendations to make on the instruments?
Members indicated agreement.
12:44
Meeting continued in private until 13:05.