LIZ CAMERON

The recognition by the Scottish Government of the devastating impact that sharp business rates increases could have in the hospitality and energy sectors and on the economy of the north east of Scotland is welcome, and its decision to mitigate the worst of the excesses of the rates revaluation on these sectors and regions demonstrates that it, in this case at least, it understands the legitimate concerns of business.

However, applying a temporary fix for the coming year does not get to the root of the problem. In the hospitality sector for example, where a business’s turnover is often used as an indicator of a property’s rental value, some valuations have increased even when a business’s actual turnover has not.

Moreover, when a few business sectors in isolation are hit with a massive rates increase, whilst others are left relatively untouched, it raises question marks over the accuracy and reliability of methodology being used by regional assessors for valuations.

The Scottish Government claims to have “no powers to direct [assessors] or locus to comment on their methodology used to determine rateable values” (answer to question S5W-06882, given by Derek Mackay MSP on 20 February 2017).

If this is indeed the case, then it begs the question: how on earth is the issue which has caused this latest business rates outcry going to be addressed?

All of this serves to underline the absolute necessity that the business rates system in Scotland is fundamentally reformed from the ground up.

Yes, the independent Barclay Review will report in July and, having spent the best part of a year gathering evidence from across Scotland and looking at international comparators, our hope is that this will deliver a solid basis for reshaping business rates.

However, any reform will be incomplete without a comprehensive review of the valuation framework and methodologies used by assessors for each and every non-domestic property in Scotland.

Businesses need to know when they receive their valuation that it has been fairly assessed and is demonstrably correct. Trust needs to be restored in Scotland’s biggest business tax, which raises over £2.6 billion per year.

If the Scottish Government cannot do this alone, then it needs to work with local government, with the assessors themselves and with the private sector to find out what has gone wrong and to find and implement a solution that will deliver for business in the long term.

Liz Cameron is chief executive of Scottish Chambers of Commerce