New Deal for Business Non-Domestic Rates sub-group minutes: 6 November 2024

Attendees and apologies

• Ivan McKee, Minister for Public Finance (chair)
• David Lonsdale, Scottish Retail Consortium 
• David Melhuish, Scottish Property Federation
• Stacey Dingwall, Federation of Small Businesses Scotland
• Gavin Stevenson, Night Time Industries Association 
• Mike Grieve, Night Time Industries Association
• Leon Thompson, UK Hospitality Scotland 
• Graham Howarth, Gerald Eve 
• Paul Togneri, Scottish Beer and Pub Association
• Jamie Mackie, Scottish Grocers’ Federation 
• Marc Crothall, Scottish Tourism Association
• Fiona Campbell, Association of Scotland’s Self Caterers
• Colin Wilkinson, Scottish Licensed Trade Association 
• Heather Honeyman, Scottish Assessors Association 
• William McFarlane, Scottish Assessors Association
• Brian Rout, Scottish Assessors Association
• Robert Nicol, Scottish Assessors Association 
• Jonathan Sharma, COSLA 
• Les Robertson, Institute of Revenues, Rating and Valuation
• Alan Puckrin, Inverclyde Council
• Scottish Government officials

Apologies

• Stephen Montgomery, Scottish Hospitality Group

Items and actions

Welcome and update

The Minister welcomed members to the meeting and noted the apologies received. The minutes of the last meeting were agreed. 

The Minister reported the publication of the annual non-domestic rates (NDR) relief statistics on 5 November and noted that the task team on the impact of reliefs would meet later in the month to discuss this in more detail.

UK Autumn Statement and Budget 2025-26

The Minister invited members to share their Scottish Budget asks in light of the UK Government Autumn Budget. 

David Lonsdale asked for an update on Fair Work conditionality on NDR reliefs and licenses. The Minister referred to ongoing discussions but stated that thinking was evolving towards not pursuing this. 

David Lonsdale referenced the Scottish Retail Consortium Scottish Budget Recommendations 2025-26 which included asks to: scrap the idea of a surtax on grocery stores; deliver on the pledge to restore rates parity with England (Higher Property Rate); blunt any increase in the business rate; use Barnett monies from English Retail, Hospitality and Leisure (RHL) relief to keep down Scottish retailers' rates bills; and no living wage conditionality. 

Paul Togneri called for the 40% RHL relief which will be available in England to be matched in Scotland, pointing to the pressures coming from the UK Government’s Budget such as increases to employers’ national insurance contributions. He stated that without relief it was hard not see closures down the line. 

Marc Crothall stated that relief is a number one priority for business survival and competitiveness and shared Scottish Tourism Alliance’s Scottish Budget 2025-26 Priority Asks. He highlighted the low cash liquidity for business, and noted that driving the economy, protecting jobs and staying competitive as a destination are key.  

Stacey Dingwall commented that NDR relief is a main ask from Federation of Small Businesses Scotland, and offering such relief would demonstrate that the Scottish Government has listened as per the New Deal for Business.

Gavin Stevenson also called for relief, and pointed to the challenges from the UK Government’s Budget. He noted the night-time industry is labour-intensive and there are real concerns about survival and ability to invest. He raised concerns that the sector in Scotland would struggle to remain competitive. He stated that price rises would be required to offset increases to minimum wage and employers’ national insurance contributions, adding that once the impact on the supply chain was taken into account, this could mean price increases of around 10%. 

Gavin Stevenson also referred to the impact of transport initiatives such as low emission zones (LEZs) and bus gates. He called for targeted support to bring people to town and city centres, and for transport initiatives to be more flexible while preserving the policy intent. He also queried whether there was scope to offer something beyond 40% RHL relief for larger cultural venues in city centres which are also impacted with high uprates in costs. 

David Melhuish raised concern about the size of the NDR tax base and cautioned that it was facing shrinkage for a variety of reasons. He stated that while the benefits of the Business Growth Accelerator relief should continue, there was a need for incentives to support the renovation and redevelopment of existing buildings to better align with local government and Scottish Government policy. He pointed to examples of ratepayers paying rates on ‘piles of rubble’ whilst trying to redevelop a site. Gavin Stevenson cited the example of a long-term empty retail conversion requiring planning permission, stating a significant disincentive is the time it takes to get planning permission and licenses whilst paying NDR. He also stated that the NDR system encourages properties to be back into use in the narrowest of circumstances. 

Leon Thompson called for at least 40% relief to be passed on to hospitality businesses to provide a lifeline and help business confidence. He also called for reform of NDR and a fairer system that does not penalise the hospitality sector. He acknowledged that there had been productive meetings with Scottish Ministers but called for real movement. 

David Lonsdale pointed to the UK Government’s policy paper ‘Transforming Business Rates’ and commented that it indicates the UK Government has accepted the principle that RHL firms are disproportionately hit by NDR and has promised a permanent business rates discount of some sort, from Spring 2026. He asked whether the minister had any views on it. Scottish Government officials highlighted that the rates would only be announced in Autumn 2025. 

Graham Howarth commented that the Scottish Government had frozen the basic rate poundage in 2024-25, and that this should be frozen for 2025-26 in line with England. He echoed the Scottish Retail Consortium’s request to restore parity for the Higher Property Rate which is at present higher than equivalent properties in England. This would encourage further investment which would be welcomed. 

The Minister thanked everyone for sharing their views and called the meeting to a close.