Business Hustings: Swinney warned over tax regime

First minister John Swinney faced sustained pressure over the Scottish Government’s economic record as business leaders warned that the current rates regime risks turning high streets into ‘tumbleweed’ zones.

Speaking at the Royal Bank of Scotland’s headquarters at Gogarburn in Edinburgh, the SNP leader was challenged repeatedly over business rates, which many attendees argued are leaving Scottish firms at a competitive disadvantage.

The Scottish Business Hustings was organised by Prosper in conjunction with CBI Scotland, the Federation of Small Businesses Scotland, the Scottish Chambers of Commerce and the Institute of Directors Scotland, and brought together the six main party leaders and 300 senior figures from across the economy. Chaired by Gina Davidson, the political editor for LBC in Scotland, the debate focused on the structural barriers holding back growth.

Hospitality leaders pressed Mr Swinney on the absence of 75 per cent business rates relief in Scotland, a measure available to firms in England. One delegate warned that unless action was taken immediately, the ‘tumbleweed’ already visible in some towns would become a permanent feature of the Scottish landscape. Stephen Montgomery of the Scottish Hospitality Group said rates increases in Scotland were ‘unlike anywhere across the UK’ and added: “If we don’t have surviving businesses, you are going to have no tax take whatsoever.” Mr Swinney rejected the characterisation and argued that the Scottish Government’s ‘progressive’ approach was essential to protect the NHS and schools.

He pointed to a package of transitional relief worth more than £900 million and insisted that changes to employer national insurance contributions by the UK Government have had a greater impact on business costs than rates themselves. He also highlighted the Small Business Bonus Scheme, which exempts many smaller premises from paying rates altogether.

Across the panel, party leaders agreed that the system now requires review. Scottish Labour’s Anas Sarwar argued that current reliefs ‘do not touch the sides’ and called for a pause in rates increases. Russell Findlay for the Scottish Conservatives described the system as ‘completely broken’ and also backed a review. Alex Cole‑Hamilton of the Scottish Liberal Democrats argued that the current rates regime disincentivises businesses from refurbishing their premises.

Ross Greer of the Scottish Greens said that available reliefs should be targeted at spin‑outs. Malcolm Offord of Reform UK criticised political leaders more broadly, saying that their responses revealed ‘the reality that very few politicians understand business, or have ever had to make payroll.’