Chamber and committees

Will the minister take an intervention?

In that case, I cannot give way.

Scottish Conservatives want to see, and support, the measures that have been brought forward by the chancellor, Rishi Sunak in the spring statement and in the cost of living statement to deliver support, which all of our constituents are looking for.

Supporting people across Scotland and the UK with the cost of living crisis is critical, but we also need to focus on building a stronger economy. That is why we must see a relentless focus from both Scotland’s Governments on creating more well-paid jobs, cutting taxes for working people, driving business investment and innovation, unleashing a new skills revolution and levelling up across all parts of Scotland and the United Kingdom.

I move amendment S6M-05106.1, to leave out from “second home” to end and insert:

“every household in Scotland will receive £400 off their energy bills, with additional funding being provided to those on benefits, people with disabilities and pensioners; further notes that raising the National Insurance threshold and cutting the Universal Credit taper rate will allow people to keep more of the money they make; agrees that cutting fuel duty will help tackle this crisis by lowering fuel costs; notes that the £243 billion that the UK Government spends on welfare will support some of the most vulnerable families in Scotland; believes that the huge £251 million cut to Scottish local authorities has resulted in higher council tax rates across the country, and supports increasing the single person discount on council tax from 25% to 35%.”

We do not have the mechanism that the Labour Party and the Scottish Government are proposing, so it is quite clear that that cannot happen now. My amendment proposes something that can happen, so that a £134 discount can be delivered. The fact that the Scottish Government has asked COSLA to look at doing something is one thing, but it is not delivering help here and now.

If I can get the time back.

Yes. I was just going to hand back to you.

That is very helpful. Thanks very much.

That leads on to the discussions that are taking place at the minute between local government and the Scottish Government around the new fiscal framework. What is the Accounts Commission’s view on how that could work and how local flexibility could be built in, of which the committee keeps hearing councils want more? I would like to hear your views on the fiscal framework.

That is helpful. One of the key messages in the Scottish Government’s spending review document is about strengthening that partnership. As we have heard from you, the success of local government lies in unlocking community action. The key question that I would like to ask you is: what needs to be strengthened within that partnership? Is it just to do with budget lines or is it to do with shared decision making in some of those areas?

To go back to my first question, local authorities now think that everything they do is ring fenced. As MSPs, we hear regularly from councils that the flexibility to decide local priorities has been taken away from them. Does the commission have any views about strengthening that partnership?

Thank you—

Thanks, convener.

I want to ask a few questions about council finances, with ring fencing particularly in mind. Given the commission’s familiarity with councils’ and finance departments’ annual accounts, what is your current view of the Scottish Government ring fencing funding, and what percentage of total government resources is currently being ring fenced?

I start by giving the cabinet secretary my best wishes for her maternity leave. Nothing could lighten this debate more, to be quite honest.

I thank the organisations that contributed to the Local Government, Housing and Planning Committee’s work on the Non-Domestic Rates (Coronavirus) (Scotland) Bill, and I thank our clerks for the work that they have done.

The passage of the bill has not been controversial. There has quite rightly been cross-party understanding of why it is needed. We are all acutely aware of the significant impact that the pandemic has had on businesses and on the workload of assessors across Scotland, and of the significant and unsustainable backlog that has built up. As has been stated, since the beginning of the pandemic, there have been more than 49,000 non-domestic rates appeals. That compares with pre-pandemic levels of about 5,700 appeals being lodged.

Scottish Conservatives accept the main principles behind the bill, which are that we should extend the rule to cover both net annual value and rateable value, and to cover the period back to 2 April 2020—the date on which the Scottish Government amended the definition of “material change of circumstances” to exclude changes in economic circumstances.

As I stated at stages 1 and 2, the bill is a sensible measure to update Scotland’s non-domestic rates and appeals system. We have also seen changes in England and Wales to mitigate the impact of the pandemic in this regard.

The Local Government, Housing and Planning Committee agreed that, because of the level of scrutiny of the order, an extensive programme of evidence taking was not necessary. During the bill’s passage through Parliament, we have heard concerns from a number of key stakeholders, and I welcome the fact that the minister has engaged with them. Those concerns come from businesses that operate in different sectors of our economy. It is clear that we need to look at how we can improve the appeals system to ensure those rights in the future, and I believe that the Government can take that work forward.

I welcome the minister’s assurances that the bill will not remove the right of appeal. That is important for many businesses, and it is a welcome step forward. Finally, I welcome the extension of the disposal deadline by a further year beyond 31 December. That extension was asked for and—importantly—the request was accepted.

The UK and Scottish Governments have both provided unprecedented levels of support to Scottish businesses during the pandemic—for example, the provision of 100 per cent rates relief for all eligible retail, hospitality and leisure properties. That is a huge amount of support, which has been very welcome. However, those sectors are already reporting that they are not recovering to the levels that they thought they would. Just today, there were reports in Edinburgh that accommodation bookings for the festival are not where businesses thought that they would be. We know, therefore, that many Scottish businesses are not out of the pandemic hangover quite yet.

The support that was provided, which amounted to around £10 billion in 2020-21, and the announcement that the support scheme would be extended by another three months, followed by a nine-month period of relief at 66 per cent, have been very much welcomed by businesses. Taken together, those support measures have, across Government, been worth £16 billion to the sectors. It is worth reflecting on how both the Scottish and UK Governments have stepped up during the pandemic period.

During the consideration of the bill, I have put on record a number of my concerns about how support schemes have been administered and how we must learn lessons in that regard for the future. There are businesses in much the same field that have been either winners or losers in being able to access support, sometimes simply because they are in different council areas.

It is clear that the processes that councils have used have not been universal. I hope that that issue is coming out of the assessor process, and that the Government will consider it as well. We all hope that we will never face a similar public health emergency again. Nevertheless, we must take forward the learning from the pandemic in that regard.

I turn to the important issue of support for businesses as we move forward. Scottish retailers have called on the Scottish ministers to lower business rates in Scotland permanently. Firms in the retail, hospitality and leisure sectors were fully exempt from non-domestic rates during the pandemic until 31 March. I welcome the SNP ministers’ extension of rates relief for the first quarter of the financial year, but we need to consider what additional support could be made available to those sectors that are clearly not recovering to the levels that they thought they would be.

It is clear that the pandemic has had a negative impact not only on our town centres but on many rural communities. Local businesses that were thriving before Covid have closed, are struggling to pay their bills or are finding that the way in which their business operates has completely changed. Significant consideration needs to be given to how businesses can adapt to what is now a very different environment.

As I have said, Scottish Conservatives want the Scottish Government to continue business rates relief. I want to put that on record.

Scottish Conservatives will support the bill to update Scotland’s non-domestic rates legislation and we support the committee’s recommendations, too. The legislation is similar to that which has been passed in both England and Wales and is, I believe, the most straightforward way to sustain an already overwhelmed appeals system. As I said, the Scottish Conservatives will support the bill at decision time.