Overview
The Bill aims to update the ‘non-domestic rates’ system in Scotland. Non-domestic rates is a tax on non-residential buildings or properties. Local councils use the money to help pay for local services.
The amount paid depends on the ‘rateable value’ of the property. This is a value based on its size, location and other things.
The proposed changes to the systems supporting this tax include:
- how this tax is collected and enforced
- how information about changes to properties is collected and shared and the introduction of fines for not replying to requests for information
- how the property valuation system works, including:
- properties being re-valued every 3 years instead of every 5 years
- those paying the tax can challenge the rateable value of a property after it has been assessed before having to appeal
- changes to the administration of the ‘valuation roll’ (register of value of all non-domestic properties in Scotland) including being able to send emails about changes made
Changes to discounts
Some types of organisations get discounts for this tax, for example charities. This Bill proposes removing this discount from private schools, except specialist music schools.
It proposes guidance for councils on administering the discounts for not-for-profit recreational clubs.
Stronger tax avoidance measures
This Bill proposes stronger measures for councils to:
- decide if a property is residential or commercial
- recover unpaid rates
It also gives Scottish Government ministers powers to make anti-tax avoidance regulations.
You can find out more in the Explanatory Notes document that explains the Bill.
Why the Bill was created
This Bill is trying to implement recommendations from the Barclay Review. Published in 2017, it was the first review of this tax system for years. The review suggested 30 recommendations and some of these have already been made.
There have been recent changes to the non-domestic rates systems in England and Wales. To maintain a competitive business environment, the Scottish Government believes the system here also needs to change.
This system would be more reactive to economic changes.
You can find out more in the Policy Memorandum document that explains the Bill.
The Non-Domestic Rates (Scotland) Bill became an Act on 11 March 2020
Becomes an Act
The Non-Domestic Rates (Scotland) Bill passed by a vote of 78 for, 32 against and 6 abstentions. The Bill became an Act on 11 March 2020.
Introduced
The Scottish Government sends the Bill and related documents to the Parliament.
Related information from the Scottish Government on the Bill
Why the Bill is being proposed (Policy Memorandum)
Explanation of the Bill (Explanatory Notes)
How much the Bill is likely to cost (Financial Memorandum)
Opinions on whether the Parliament has the power to make the law (Statements on Legislative Competence)
Information on the powers the Bill gives the Scottish Government and others (Delegated Powers Memorandum)
Stage 1 - General principles
Committees examine the Bill. Then MSPs vote on whether it should continue to Stage 2.
Committees involved in this Bill
Who examined the Bill
Each Bill is examined by a 'lead committee'. This is the committee that has the subject of the Bill in its remit.
It looks at everything to do with the Bill.
Other committees may look at certain parts of the Bill if it covers subjects they deal with.
Who spoke to the lead committee about the Bill
First meeting transcript
The Convener
Under item 2, the committee will hold its first evidence session on the Non-Domestic Rates (Scotland) Bill at stage 1. I welcome Eileen Rowand, director of finance at Fife Council; Jonathan Sharma, policy manager at the Convention of Scottish Local Authorities; Kevin Fraser, treasurer of the Institute of Revenues Rating and Valuation Scotland; and Morag Johnston, director of financial business services at Glasgow City Council and representative of the Society of Local Authority Chief Executives Scotland.
We will move straight to questions from members.
Alex Rowley (Mid Scotland and Fife) (Lab)
Does the bill, along with the early measures that the Scottish Government has implemented, sufficiently address the Barclay review’s findings and recommendations?
Jonathan Sharma (Convention of Scottish Local Authorities)
COSLA very much welcomes the bill. It covers a number of the Barclay review recommendations, as we understood them. We have worked very closely with the Scottish Government, and local government offices have been involved in that work, too. We have worked on an implementation advisory group, so we have a good understanding of how the Barclay review recommendations are being managed.
We understand why some recommendations have not been progressed and where the Scottish Government is coming from. I can mention issues relating to charity relief as the conversation develops. In the main, the provisions in the bill are what we expected to see following the Barclay review recommendations.
Morag Johnston (Society of Local Authority Chief Executives)
I echo those points. The bill picks up a number of the Barclay review recommendations. Its provisions will enable local authorities to bill and collect taxes more quickly, which we want to do. The move to three-yearly revaluations will also help.
Alex Rowley
Scottish councils are generally happy that the bill’s proposals will implement the Barclay review recommendations.
Jonathan Sharma
Yes. In our discussions with the Government, we have said that certain things need to happen. If there are to be three-yearly revaluations, it is key that the assessors are fully supported. We welcome the fact that the Scottish Government has provided funding for 2019-20 to ensure that assessors can start their preparation. It is essential that such funding continues into the next period, to ensure that assessors are able to undertake their activities effectively.
There must be reform of the appeals system. A significant amount of work has been undertaken on that, and local government representatives and assessors have been involved in discussions with the Scottish Government and other stakeholders about what the new appeals system should look like. That reform has to happen, because the three-yearly revaluation cannot proceed unless there is a convincing enough appeal system that will reduce the number of, in particular, speculative appeals.
Although we support the bill’s provisions, the essential thing is what is delivered on the ground.
Andy Wightman (Lothian) (Green)
I will talk about the broad scope of non-domestic rates. This is the first non-domestic rates bill that the Parliament has dealt with in the devolution era. In 2012, the Government was committed to conducting what it described as
“a thorough and comprehensive review of the whole business rates system.”
However, the Barclay review was limited to looking at the impact on business, and asked just one question.
The bill is an opportunity to change the law on non-domestic rates. Are there other things that you might wish to use the bill to do on, for example, who sets the rates and on the design of relief schemes? NDR was a local tax until the 1990s, after which it was centralised. Are there other things that you want that go beyond what the Government has introduced to Parliament?
Jonathan Sharma
I guess that it is best for me to answer that question. COSLA wants greater local fiscal empowerment, which is a key driver for us at the moment. We welcome the commitments that were made by the Scottish Government in the Budget (Scotland) (No 3) Bill, which were supported by the Greens following the stage 2 amendments.
We are strongly committed to working on a cross-party basis to look at a potential replacement for council tax and develop a fiscal framework that would encompass the whole local funding arrangement. We believe that non-domestic rates should be considered as part of that; it should not sit outside it. At the moment, it is a national tax—there is no escaping that.
We welcome the proposal to devolve empty property relief, and we are speaking to Government and local government officers about what that would look like. We need decisions from COSLA’s leadership on the options and its perception of the risks for local government.
It is important to stress that, although we might aspire to returning non-domestic rates to local government, a huge amount of thinking is required before we can even consider whether that would be possible. That includes a whole range of issues such as how local government financing would work and how the return of non-domestic rates would bring back accountability and proper local democracy to those who pay them.
There is a long road to travel to get anywhere near that happening. Nonetheless, there are aspects of the bill, along with potential devolution of empty property relief, that would start to bring in more local fiscal control of the rates system, and that is welcome.
Andy Wightman
I am aware that you have all been heavily involved in the Government’s follow-up to the Barclay review, and I saw that there were 27 responses from local authorities to various Barclay recommendations. However, now that the bill is before Parliament, there is an opportunity to do more, if we wish to.
I move on to the two Barclay recommendations that were rejected by the Scottish Government. Recommendation 28 is that all non-domestic properties should be on the valuation roll. That would mean that agricultural land, which is currently exempt, would be on the roll. We could give that land 100 per cent relief if we wanted to—if we did that, at least the cost would be transparent. Recommendation 29, which was also rejected, is that large-scale commercial processing—mainly food processing—taking place on agricultural land should pay the same rates as commercial food processing on a food park.
Do you have any views on the recommendations that were rejected? Are you content with that?
Eileen Rowand (Convention of Scottish Local Authorities)
We understand that it was the scale of the work required to get such properties on the valuation roll and then whether they would be exempted that led to those recommendations being rejected. We have had discussions with the Government about that and we understand the rationale for its decision.
Andy Wightman
You understand where the Government is coming from, but do you agree with its recommendations?
Eileen Rowand
The working group reached a position where it supported that.
The Convener
Will you clarify that point for me? Did the group support that recommendation 29 should be agreed to or that it should be left out because of the complexities of implementing it?
Eileen Rowand
We supported that it should be left out because of the complexities and the practicalities of implementing it.
Kenneth Gibson (Cunninghame North) (SNP)
We have already learned that such a measure would not raise any money, so what would be the point of it?
Andy Wightman
If no one else has anything to add, I will move on to recommendation 22, on the small business bonus scheme loophole for self-catering properties. Section 5 of the bill makes provision to define what a dwelling is, which is a precursor to implementing recommendation 22, which is to close a loophole whereby people with holiday homes can claim that they are self-catering properties for let and put them on the non-domestic rate roll then claim under the small business bonus scheme and pay nothing. The policy proposal is that such properties have to be intended to be let for 140 days and actually let for 70 days to qualify to be on the non-domestic rate roll.
The bill does not implement the policy recommendation—it only makes enabling provisions to allow the regulations. I noticed that there was quite a split of opinion in the responses in the report, “Analysis of responses to Barclay Implementation: A consultation on non-domestic rates reform”. IRRV Scotland said that properties
“must meet the multiple of 70 days total over the three or five years”
or over one year, and Scottish Borders Council asked what would happen if the requirement to let for 70 days was not met. Has anyone got any views on how the proposal might work in practice?
Kevin Fraser (Institute of Revenues Rating and Valuation Scotland)
It would be difficult to make it work in practice. We would like appropriate rates relief to be given to proper holiday lets. Sometimes, second homes are put into the ratings system purely for financial gain, and we want that situation to be addressed. The problem with the 70-day rule is that, when first written, the proposals referred to “a year” but did not specify whether that was a calendar or a rolling year. Therefore, there could be difficulties if the 70-day period crosses a financial year. It can be extremely difficult if things frequently move in and out of the rates roll and the valuation list, or if things change quite drastically.
We recognise that some properties are usually let out or occupied regularly, but that that might not be possible in some years—perhaps because someone is ill or there are structural issues and it is difficult to access the property. There may be situations in which occupation may not be possible in one particular year but the rules have been met in general. We want there to be something that addresses that.
Andy Wightman
Do you believe that we can do it?
Kevin Fraser
It will be quite difficult to judge where the decision-making power lies between the local authority and the assessors. However, it is achievable.
Andy Wightman
The assessors make decisions on what is admitted to the roll, but the separate question is whether councils should have discretion in how they apply the relief. I suppose that that is really a question for the councils.
Kevin Fraser
Yes. It would be useful for them to have that discretion.
Alex Rowley
What are the potential policy impacts of the changes to guidance for local councils on granting discretionary relief for recreational clubs? Do you have any concerns?
10:00Kevin Fraser
We would still want to support local and community-based sports clubs and anything of that ilk. There is an issue if wider sports clubs or organisations go beyond the local authority’s boundaries. There is recognition that there are two streams of sports clubs: there are local clubs, which we would want to support; and there are national clubs, which can afford to pay their way through membership income or other income. Perhaps we need to consider that approach.
Alex Rowley
So, a local bowling or football club—
Kevin Fraser
I would still want to see them being supported. However, there is an argument that larger-scale golf clubs, for example, should be able to pay their way.
Graham Simpson (Central Scotland) (Con)
I will jump back to something that Jonathan Sharma said about his desire to see non-domestic rates fully devolved to local government. He seemed to be saying that that might be too big a job. Surely, now is the opportunity to act. We have the bill in front of us, so why has that work not been going on?
Jonathan Sharma
As I said, we welcome the commitments that the Scottish Government made at stage 1 of the Budget (Scotland) (No 3) Bill to look at developing a fiscal framework. We think that non-domestic rates should be part of that, along with a potential replacement for the council tax. We want to couch this in terms of local taxation and local government funding, so that we can start to ask the questions. There are a lot of questions to ask about non-domestic rates and returning them to local control—if we were simply to do that tomorrow, that could create substantial disruption to local authorities, businesses and communities.
We believe that there is a path to follow. So far, we have not had that discussion with Government, but we hope that those questions will be part of it.
Graham Simpson
Do you not think that there is a role for the bill in tackling the issue?
Jonathan Sharma
There is no role for the bill to tackle it. Further devolution will be a longer-term discussion that will go into the next spending review and even beyond that.
Graham Simpson
Given that we have legislation in front of us, if you do not deal with the issue now, do you not think that there is a danger of it getting kicked into the long grass?
Jonathan Sharma
Given the commitments that it has made to us, I do not think that the Government has accepted that this is the end of the road for what could be done on local fiscal empowerment. I do not want to say whether the Government thinks that it has done enough on rates, but when it comes to local fiscal empowerment, it is committed and willing to sit down with us and the political parties to see what that looks like. That should help to shape how we look at a wider, more far-reaching transfer of powers on non-domestic rates.
Kenneth Gibson
I will follow up on that point. Do you see the domestic rates issue as being a two-stage process, whereby the Non-Domestic Rates (Scotland) Bill will be put to bed during this session of Parliament and we will have a further piece of legislation that looks at local fiscal empowerment in the next session?
Jonathan Sharma
I cannot spell out the shape of that. We are still in the early stages of discussion. We know that ministers are speaking to other political parties about the issue; they might not be speaking specifically about non-domestic rates, but they are talking about the fiscal framework and local fiscal empowerment.
Kenneth Gibson
The argument that is always made against giving local authorities the power to set rates locally is to do with where people spend their money. For example, people in North Lanarkshire spend their money in Glasgow, which obviously gives Glasgow a real advantage in rates income relative to North Lanarkshire. There are plenty of other examples from around Scotland of our cities benefiting in that way.
However, does that not just mean that the Scottish Government would have to readjust the grant settlement for local authorities to take account of the money that is lost by some and gained by others? Does COSLA take the view that, if that happened, we would just start with a clean sheet and move forward from there? In such a reorganisation, Glasgow City Council’s grant would be reduced, North Lanarkshire Council’s grant would be increased and that would be the page from which we would start. Is that how you envisage the process working?
Jonathan Sharma
As I have mentioned, those are the issues that we would have to discuss properly if any step were taken to consider a return of rates to local control. We have not had that discussion. I do not think that the bill is the place to have such discussions, but we welcome the opportunity to flag up the issue to the committee.
The Convener
We are veering away from the subject matter.
Kenneth Gibson
Yes, we will leave that for another day.
The Convener
I am sure that we will have that discussion on another day.
Kenneth Gibson
I think that it was important that we got that issue out of the way, because it is obviously the elephant in the room.
Graham Simpson
I want to look at the change whereby revaluations will be carried out every three years. What impact will that have on your organisations? The question is not just for Mr Sharma—we can hear from other people.
Morag Johnston
I mentioned in my introductory comments that I think that councils support that move to three-yearly revaluations. We accept that additional costs will be associated with that, which the financial memorandum to the bill sets out. At this stage, it is difficult to be certain what those additional costs will be, so we hope that conversations about that can continue with the Government and that we can keep those costs under review.
I have mentioned local authorities’ role in billing and collection, and their engagement with ratepayers when they receive their new rates bill. Although ratepayers will have received notification from the assessor at the time of the revaluation, it tends to be the local authority that ends up getting involved in the discussions at the time that the revaluation notices are issued.
The move to revaluations every three years will remove some of the issues that we experienced with the most recent revaluation. The fact that that took place after a seven-year period explains a lot of the significant movements in certain areas. I think that everybody’s view is that, if we move to three-yearly revaluations, significant variations will be limited in certain sectors, because people will not have to wait as long for the revaluation to catch up with what has happened economically.
Eileen Rowand
We welcome three-yearly revaluations. As Morag Johnston said, we hope that that will help us to get a better indication of market values and to keep that up to date.
If the assessors are to deliver on three-yearly revaluations, there will have to be a reduction in the number of appeals, because of the sheer volume of that work. We must consider the impact of what is proposed. We very much support the move to three-yearly revaluations, but we really need to take action on the appeals, and there are proposals in the bill to do that.
Kevin Fraser
You have a full house, because I, too, fully support three-yearly revaluations. I also support the move to a one-year rather than a two-year tone date, which will bring the values closer to market values at the time. As I have mentioned, I have concerns about the volume of appeals and the ability of the assessors to deliver the change.
The Convener
Andy Wightman wants to come in at this point. Is that okay, Graham?
Graham Simpson
I was going to continue on the same line of questioning, but I am happy for Andy Wightman to come in.
Andy Wightman
Section 2 of the bill will change the period between revaluations from five to three years, but it will not change the scope for ministers to change that period, as they have in the past. Do think that the bill should hardwire in the three-yearly revaluation period, or should the power to change the period still exist?
Morag Johnston
I do not know whether we have formed a view on that. There always has to be recognition that something might occur that might mean that achievement of a three-year revaluation might not be good for local authorities, assessors or even ministers. On the basis that it is useful to have flexibility, we might not want to hardwire in three-yearly revaluations.
Alex Rowley
Are you not concerned that ministers might be concerned about an upcoming election?
The Convener
You are so cynical, Alex.
Alex Rowley
Would removing the politics from it not be a better way of ensuring that what is meant to happen does happen?
Morag Johnston
I suppose that my response was based on the assumption that ministers’ use of that flexibility would be economically rather than politically driven.
The Convener
Absolutely. [Laughter.] Following Alex Rowley’s cheap political shot, we will move back to Graham Simpson.
Graham Simpson
Thank you, convener. Morag Johnston mentioned that moving to three-yearly revaluations will mean extra costs. Have there been any discussions with the Government about how to meet those extra costs?
Morag Johnston
I understand that the financial memorandum reflects primarily the costs that will be incurred by the assessors. As the cycle stands at the moment, they will have staff who are working on appeals or a revaluation. If a three-yearly cycle is brought in, the assessors will need staff who do both, so additional staffing resources will be required and the associated information technology costs will have to be met.
As I mentioned earlier, the costs for local authorities are also reflected in the bill. When we were asked to submit what the costs of the Barclay recommendations could be, it was difficult for us to make an assessment. We tried to do so—we know that there will be IT costs—but it has been difficult to assess the administration costs. We recognise that we can continue to have discussions with the Scottish Government.
Kenneth Gibson
Do you think that the financial memorandum represents a realistic assessment of the costs that the bill will impose on the assessors and local government? Do you have any issues with it?
Jonathan Sharma
I am probably best placed to answer that. The financial memorandum broadly reflects the figures that COSLA provided to the Scottish Government, which we welcome, because there have been situations in which we have submitted figures but they have been ignored.
I will add to what Morag Johnston said about the assessors’ costs. We tested those costings vigorously with the assessors, who are having to make estimates as well. The figures will never be absolutely accurate, but there is room for a bit of refinement, which the Government officers want us to do. We and the assessors will look at their costs for future years; their costs are the most significant from the point of view of administration costs, although there are costs to councils as ratepayers, which we might come on to.
With regard to the councils’ costs, in the course of preparing our response to the committee—I apologise for not being able to provide it until our leaders have signed it off—councils have said to us, “Hang on a minute—this provision will come at a bit of a cost,” so we need to look again at the figures that we provided to the Government. The Government officers know that, and they have said, “Go away and start to speak to the councils again.” We are looking to do that and we hope to bring back more refined costings that will help to inform the Government’s budget considerations.
The Convener
We will go back to Graham Simpson, although Andy Wightman might want to come back in on that point later on.
10:15Graham Simpson
If the bill is passed, the next revaluation in Scotland will be in 2022. I believe that the next revaluation in England will be in 2021. A lot of firms operate in England and Scotland, so would it be doable to bring forward the revaluation in Scotland to 2021? Would that be a good idea?
Jonathan Sharma
All I can say is that, from our meetings with the assessors through the Barclay implementation advisory group, I got the impression that they are pretty clear that even getting to 2022 will be challenging. It is more a question for the assessors, but that is what they have told us.
Eileen Rowand
I echo that view. The assessor whom I deal with would have real concerns about being able to carry out the revaluation before 2022, and they need to take into account where they are on appeals and other matters. It would be a real struggle for them to bring forward the revaluation.
Graham Simpson
There will still be outstanding appeals.
Eileen Rowand
Yes.
Graham Simpson
On a different subject, how will the proposed changes to the valuation roll and notices impact on the administration of non-domestic rates?
Kevin Fraser
Are you referring to the markers for the new and improved properties and the properties that are under repair?
Graham Simpson
Yes.
Kevin Fraser
The changes will help us greatly. We are already setting up some informal arrangements with assessors locally, whereby they will voluntarily put markers that are similar to those that are proposed on the roll. Including provisions on the markers in legislation will ensure consistency throughout all local authority areas and will help local authorities to make changes more quickly. More important, it will save people from needing to make applications for certain forms of relief, as it will be possible for those to be awarded automatically.
Graham Simpson
Mention has been made of appeals. What do you think about the proposal for a pre-appeal mechanism?
Kevin Fraser
Again, that is more a question for the assessors to answer directly, but we welcome the proposal. We welcome any appeal being dealt with at the earliest opportunity, at the lowest level possible.
Graham Simpson
Will the proposal help to reduce the number of appeals?
Kevin Fraser
It would force there to be an earlier exchange of information, which should be supported, because the lack of such an exchange is usually the cause of any disagreement about rateable values.
The Convener
What are the expected impacts of changes to how parks are entered on the valuation roll? Is there likely to be an impact on the services that are offered within park spaces?
Morag Johnston
Generally, I do not think that the proposals will necessarily impact on the services that are offered, but there is one area of concern. As you will be aware, a number of local authorities have set up charitable arm’s-length organisations, some of which are responsible for leisure services, which might take place in a park environment.
It is welcome that, very early on, the decision was made not to take forward the Barclay review recommendation regarding charitable relief for arm’s-length external organisations. However, conditions have been set and, in effect, a baseline has been created for the rates relief that is provided to charitable council-owned organisations.
Our reading of the bill is that if, in the future, a council’s ALEO was to set up within a park, it would not get charitable relief. There would, therefore, be a cost to local authorities in those circumstances. Existing services would not be affected, but there is a concern that there could be an additional cost for services delivered by an ALEO in the future, which we would need to take into account before setting up a new service.
The Convener
Do you accept or disagree with the suggestion that the change creates fairness across the piece? If something inside the park is providing pretty much the same service as something outside the park, is it fair if the one outside is paying rates while the one inside is getting relief?
Morag Johnston
If it were to be an organisation other than a local authority organisation, the way the bill is written—as we have interpreted it—means that it would be liable for rates. In that context, I think that the change is fair. My point was about the considerations for local authorities in relation to the additional costs that might fall to them because of the change.
The Convener
Okay. Does anybody else have any comments on that?
Eileen Rowand
As Morag Johnston said, the restriction on the relief that our ALEOs can receive, taken together with the changes that are proposed in the bill, means that there could be a cost pressure. We believe that those organisations are there for the community good and to deliver public services, so that is obviously causing a bit of concern.
The Convener
Is that the sort of technical issue that you are discussing with the Government or anybody else who is involved?
Jonathan Sharma
We have made it clear to the Government all along that that is a concern. We understand that if there are commercial facilities sitting in a park and others on the edge of the park, there is a question about why those outside the park should be paying rates when the ones in the park are not. However, to put this in context, the bill proposes an exemption for specialist schools—
The Convener
I am about to come on to that issue.
Jonathan Sharma
My point is that, if those schools are seen as being valuable, and our council services within the park are valuable, the fact that they are run by an ALEO is simply an organisational consideration rather than—
The Convener
Are those discussions going on just now?
Jonathan Sharma
Yes, they are.
The Convener
Okay. That is great.
Annabelle Ewing (Cowdenbeath) (SNP)
I have a brief supplementary. Taking advantage of Eileen Rowand’s presence, I have a question about Fife. The bill, as drafted, would require local authority owned parks that generate a net profit for the local authority to be entered for the first time in the valuation roll in circumstances in which there is not “free and unrestricted” access to the park, or where a local authority park consists solely of facilities that are charged for. At this time, would any park in Fife be impacted? I appreciate that I am putting you on the spot.
Eileen Rowand
We have considered the possible impact for Craigtoun country park, but we need to explore that further. There could be implications, because it is run by a body other than the council.
Annabelle Ewing
Okay. Is that the only park that springs to mind?
Eileen Rowand
Yes. I would have to come back to you with further detail.
The Convener
We will move on to the impact of changes to rates relief for independent mainstream schools. Does anyone have any comments on that? Will it impact them hugely or lightly?
Morag Johnston
For local authorities that bill for and collect rates, it will just be somebody else to bill and collect rates from. From that perspective, I do not see any particular issue. I imagine that there are broader issues concerning the fact that organisations that previously had relief from rates will now have to pay them. However, that was well discussed when Barclay first made that recommendation.
The Convener
Okay.
Graham Simpson
From COSLA’s point of view, there is the potential risk—and it is just potential—that some kids might leave the independent sector and come into the local authority sector schools. Have you done any analysis of that, or of the costs to councils?
Jonathan Sharma
We have not done any analysis, but that is interesting to hear. In our submission to the Scottish Government, we said that it is fair that the independent schools be treated the same as local authority schools. We are not aware that the changes would drive loads and loads of children out of independent schools and into local authority ones.
Eileen Rowand
I echo Jonathan Sharma’s comment. We believe that there is an issue of equity and we believe that the suggested changes are fair.
Alex Rowley
I want to broaden this out to the bill’s impact on the cost of council rates for a rate payer. Councils pay rates on their schools as they do on other buildings. Is there any concern in councils that the bill will have a negative impact on council finances?
Eileen Rowand
We have already raised the potential cost implications in relation to the parks. There has also been a lot of discussion about an increase in our administration costs. It is important for councils to look at the quantum of funding; the sums that are collected for non-domestic rates help to fund councils. If we improve our collection rates with earlier interventions, it should help us. We are looking at the financial impacts, and we are flagging the one relating to parks.
Andy Wightman
The last bit of the Barclay review’s remit was that the recommendations should be based on overall revenue neutrality; in other words, any recommendations that result in increases in rates should be balanced by decreases in rates.
It is my understanding—I might be wrong—that what drove this recommendation on schools was that councils looked down the list of reliefs and thought, “Which ones can we withdraw because we need to raise some money?”. It was not based on any fundamental appraisal of which properties that are currently charged for relief should have that status removed. For example, as I understand it, charitable relief will still be available to Shelter and Oxfam shops on the high street. That does not seem to be fair. I am trying to work out why you think that it is fair to pick out one particular sector from charitable relief—that is, schools—while not tackling universities, which are also charities.
Also, the provisions in section 10(3) of the bill are about exempting independent music schools. There is only one independent music school, but there are four mainstream centres of excellence—in Dyce, Plockton, Bearsden and the city of Edinburgh. Why is that fair? I do not understand that fairness argument, because it seems to apply to one narrow bit of the non-domestic rating system.
Morag Johnston
I will try to assist with that question. As has already been said, the focus on independent schools is seen as improving fairness because at the moment local authorities provide schools and have to pay rates for those schools. Therefore, the conclusion to charge fee-paying or independent schools was because local authority schools do not get rates relief. That is where the fairness argument has come from.
Andy Wightman
My question is whether that relief should also apply to charity shops in the high street.
10:30Morag Johnston
The challenge for local authorities is in determining whether the charity is national or local. Whether the benefits from the funds that are raised by the charity are seen locally—whether the funds stay in the local community—can be a consideration for local authorities. The issue of national charity shops has not necessarily come out through the bill process and, as far as I am aware, it has not been discussed more widely.
Andy Wightman
Do you support the relief for independent music schools, which do not have to pay full rates although mainstream, state-supported music schools do?
Morag Johnston
We need to try to understand why the independent music schools have been identified as being different from other independent schools. I draw a comparison with my point about local authority schools having to pay rates and other schools currently being partially exempt, which may explain why certain independent schools would continue to get rates relief and others would not. From the perspective of administrative processes, it would create more complexity in the system.
Andy Wightman
What would create more complexity? Are you referring to the provisions of the bill?
Morag Johnston
The fact that certain schools would no longer get relief, but a group of independent schools would still get relief would do that. We need to understand how to determine which schools fall within that group. If a new school is established, how do we know whether it is eligible for relief? My point relates to the potential challenges around non-domestic rates administration.
Kenneth Gibson
I point out that charity shops in my constituency are all run by local volunteers.
Presently, independent schools can get an 80 per cent discount on non-domestic rates. After the bill is passed, if a local authority wishes to continue to give those schools an 80 per cent discount, surely it will be allowed to do so?
Kevin Fraser
Under the Community Empowerment (Scotland) Act 2015, local authorities can grant any relief that they wish, but they have to fully fund it, therefore it is a financial matter.
Kenneth Gibson
The councils would still have the ability to grant the discount, though. The argument that was made earlier was that, if the 80 per cent discount was removed from independent schools, it might have an impact on state schools. My understanding is that charging independent schools at the full rate would result in only a 2 per cent increase in annual school fees, but local authorities would still have discretion as to whether they grant those schools the discount.
Kevin Fraser
Yes, under the 2015 act, the local authority is free to grant relief if it chooses to do so, as long as it fully funds that relief. There is an argument that that approach is an option, depending on individual financial implications.
Kenneth Gibson
Indeed. So, if a local authority felt that it was losing out financially by eliminating the discount, it could reinstate it.
Kevin Fraser
It could consider doing so.
Eileen Rowand
The local authority would have to consider the financial implications. It is fairly challenging for local authorities to get to a balanced budget position. Although the flexibility to grant the discount is there, we would have to look at our ability to do so.
Kenneth Gibson
Okay. Thank you.
Alexander Stewart (Mid Scotland and Fife) (Con)
I want to go back to Graham Simpson’s point. He talked about a potential knock-on effect on state schools in certain council areas. Not all councils would be in that position, but a number of them have a larger proportion of independent schools in their area. Depending on the non-domestic rates situation in that area, any such knock-on effect could potentially be an issue. For example, Perth and Kinross and Edinburgh have large independent school sectors, so pupils moving to state schools could have a massive impact on the community. Is that a potential problem, or has it not been looked at as part of the equation?
Kevin Fraser
Obviously, that is a potential problem, but my understanding is that there has not been sufficient analysis to know what the financial impact would be and what the likelihood of any transfers from private schools to state schools could be. There is still an argument that there is work to be done on that issue.
Alexander Stewart
In some locations, the number of pupils on school rolls already exceeds the number that should be on them, and the schools are at breaking point because they do not have enough capacity. The independent sector has capacity, which takes some pupils out of the state sector and supports it. If that was reversed, there could be consequences for both sectors.
Kevin Fraser
There could be.
To return to the point about the Community Empowerment (Scotland) Act 2015, a local authority does not have to give an 80 per cent discount; it could give a smaller discount if it chose to do so. Again, the local authority would not invite applications as such, but it would make people aware that there is scope for that and that the award does not have to be a full award to that value. The awards could be calculated case by case.
The Convener
If independent schools decided that they were not making quite enough money out of pupils and described or identified pupils as their profit, would that put at risk their charitable status? They have charitable status because they register as charities so, if they say that they cannot take in all those children because they will lose money, surely that would put at risk their charitable status.
Kenneth Gibson
That is certainly true for scholarship children.
Graham Simpson
There is an exemption for music schools. Would not it be relatively easy for other independent schools to rebadge themselves as music schools? [Laughter.]
Kevin Fraser
As long as there is a definition of what a music school is, it would be quite easy to scratch the surface and find out whether a school was being operated as such.
Graham Simpson
Do we have a definition?
Kevin Fraser
I think that there is one.
Jonathan Sharma
I want to speak slightly more broadly about the point that I made earlier.
There are provisions in the bill on which the Scottish Government has clearly taken a view: it is as simple as that. It has taken the view that it wants to protect particular institutions because it believes that they have a certain value. All that we want to say is that there is a point of principle relating to some of the services that local government provides, perhaps through arm’s-length organisations. That is where we are coming from.
We have not done the sort of analysis that has been alluded to. We are more than happy to take away the point that was raised about the potential risk of pupils coming across to state schools.
Annabelle Ewing
I will turn to collection of non-domestic rates. There are provisions in the bill that seek to put debt recovery of unpaid non-domestic rates on the same footing as recovery of council tax. Various proposals are intended to allow local authorities to take action sooner on debt recovery. Would the proposals in the bill achieve the objective that is sought in that regard, which is that councils would have the same powers in relation to non-domestic rates as they have in relation to council tax? Do you wish to see other provisions included in the bill?
Kevin Fraser
No—the provisions are as they should be. Aligning non-domestic rates with council tax will make things easier to understand from an administration’s and a customer’s point of view. The bill will do what it intends to do. As well as seeking earlier collection, it seeks earlier interaction with customers so that, if people are having difficulty paying, it will not be October before the council finds out. The bill will give us the right balance with those powers.
Annabelle Ewing
Do the other witnesses agree with that summation?
Morag Johnston
Yes.
Annabelle Ewing
In light of the relative ease with which people would be able to seek to recover non-domestic rates debts, do you foresee that that would be of significant help in reducing the administration around non-domestic rates and improving the financial pot that is available to local authorities?
Eileen Rowand
The main advantage of the proposed move to instalments is that there would be earlier engagement with businesses about payments. The earlier we can work with individuals, organisations or businesses to get them to a position in which they can pay, the better. The move to a similar approach to instalments to that for council tax is welcome. We hope that that will improve our recovery position, although we do quite well at recovering non-domestic rates.
Annabelle Ewing
If somebody gets into debt, the best time to engage—for the individual and the creditor—is when that happens, so that both sides can come up with something together. If things are left to slide, it is difficult to find a solution.
The proposed information notices will facilitate a greater flow of information to local authorities, which will support assessment, billing and reliefs. Is the bill’s approach to such notices generally welcome?
Morag Johnston
The bill says that, if information is not provided, the assessor and the local authority can raise a civil penalty, which is welcome. That provides the ability to make an additional charge if ratepayers do not engage.
However, I have a point about the penalty levels that the bill sets. The purpose is to encourage people to provide information; if they do not do so, it is probably because they do not want to. For some businesses, the penalty levels that the bill sets might not be enough to create an incentive to provide information, although they might be enough for others. If a business is due to pay thousands of pounds, the penalty levels might not be enough of an incentive.
Annabelle Ewing
For failing to give the assessor information, the penalty will be £100, and failing to comply within 21 days of a notice being issued will lead to a further £100 penalty and a daily penalty of £20, up to a maximum of £500. Your point is that that is adequate for some businesses but is perhaps not enough of an incentive to comply for larger players.
Morag Johnston
Yes. A penalty of £500 might encourage some businesses to pay their rates, but the risk is that it might not do that for others. Responses to consultations had suggested introducing a scale of charges that was linked to the rateable values of properties; I appreciate that that might cause a difficulty if a property had not been valued, but having the ability to vary the civil penalty rate might better meet the intention of encouraging businesses to pay their rates.
Annabelle Ewing
Are discussions about the issue on-going? Do you seek discretion—full stop—for assessors or additional provisions to carve out the larger player side of things?
Morag Johnston
I do not know whether my colleagues know about that, but I am not clear about whether such discussions have taken place. The bill needs to set parameters; I imagine that linking them to rateable value bandings might be doable, but I am not aware of any discussions about that.
Jonathan Sharma
We have had comments from councils about the penalty levels and about who can be asked for information. Kevin Fraser can correct me if I am wrong, but I think that one comment was about whether councils can approach solicitors for information. There is a question about which party withholds information.
We welcome the fact that the bill provides for assessors and councils to request the information by law. That should be enough to encourage compliance; otherwise, people would end up transgressing the law. In our submission to the committee, we said that we would consider how that works out in practice and whether there is a need to be clearer about aspects of it.
10:45Eileen Rowand
We have had discussions about that with the Scottish Government at the working group. It is therefore aware of concerns about the ability of the £500 penalty level to act as a deterrent.
Kevin Fraser
If the ratepayer was a limited company, it would be useful if there was the power to ask the director of the company to provide information and to hold them personally responsible for any failure to do so. If a company will not pay rates and its intention is to go through the phoenixing process later down the line, I imagine that—in a lot of cases—it will not be much bothered about an additional fine. However, the power to ask the directors for information and to hold them personally liable for the fees would go a long way to helping the position.
Annabelle Ewing
That is an interesting suggestion.
I have one last brief question. The penalty levels that have been set for failure to comply with local authority information notices appear to be slightly different. The initial penalty is £95, and I am not quite sure what the maximum penalty is. As far as you are aware, why has a slightly different level been set?
Kevin Fraser
To be honest, I do not know the answer to that. I know that there is a second level penalty of £370 for failure to comply with a first notice. However, I do not know why there are two different schemes.
Alexander Stewart
I will ask about anti-avoidance measures. Sections 5 and 12 aim to tackle or minimise tax avoidance. Are the tactics in the bill strong enough? Should they be seen as a positive devolution of power to local authorities or as an extra burden on the local authority?
Kevin Fraser
Those powers are definitely welcome, because there is certainly work to be done to tackle wide-scale rates avoidance. However, my worry is that the bill does not go far enough to tackle real problems such as the phoenixing companies that I mentioned. There is nothing in the bill that would help us to get out of that problem.
There needs to be more in the bill to help us to pierce the corporate veil, as the phrase goes. We need to find out who is behind the business and profiting from it, and to scratch under the surface of any companies that are set up in order to appear to be running. It would therefore be welcome to see more in the bill about phoenixing companies specifically.
Alexander Stewart
Is there enough resource or capacity, with workforce planning behind it, to achieve that? Alternatively, is it the case that there are not enough people to go and find that information, meaning that it would have to be in legislation to give that extra bonus?
Kevin Fraser
It would be helpful to have it in legislation because, at the moment, phoenixing companies are not breaking any law in the way that they operate. We therefore do not have much power to do anything. If the bill said that that action is wrong and should not happen, that would give us the power to address it head on and people would not be able to hide behind company rules, as they do at the moment.
Morag Johnston
On resourcing, part of the difficulty for local authorities is the way that the legislation is framed. As Kevin Fraser outlined, such companies are not breaking any laws, so it can be quite difficult. We would therefore look for the general anti-avoidance rule to put in place parameters that make it much easier for local authorities to get to a place where they can recover rates in a situation where there is a phoenix company.
Alexander Stewart
What does local government think needs to be there to make that happen?
Eileen Rowand
On the previous question, there would be increased policing costs for us, but those would be vastly outweighed by the additional non-domestic rates that we would be able to collect.
Alexander Stewart
As I said, local authorities do not have those powers at the moment. Unless they are beefed up, will it be a major issue to achieve that?
Jonathan Sharma
Yes. We would need to understand what is required. In a way, we are talking about a proposal for a new regulation and we have not had that discussion yet. We welcome the general anti-avoidance rule, because it is a placeholder to allow consideration of subordinate legislation or other measures to tackle the issue. We will be calling for that kind of discussion. We need to get the Government and the right people round the table to talk about how we can tackle it and whether we need legislation or other measures. The general anti-avoidance rule is about trying to give us scope to do that without getting caught up in primary legislation. There is more to come in that discussion.
Alexander Stewart
As you say, it gives you a stepping stone to something else, which would be much more beneficial to the organisations because it would bring in the revenue and help fund some of the gaps. It would also give back some of the burden.
Jonathan Sharma
COSLA would want to be fully engaged with the Government at an early point in any consideration of that.
The Convener
Will you describe what a phoenix company is, Mr Fraser?
Kevin Fraser
Phoenix companies are common in the public house trade, for example. A company will trade under a name or banner, that company will dissolve—its debts will have to be written off—and then a new company will open up the next day, but the sign above the pub will not change and nor will the staff. The business will not change—it is just the mechanics of doing away with debt and a company re-inventing itself.
The Convener
Thank you, that is very clear.
Kenneth Gibson
I will just add that that is why we have to make company directors individually liable, rather than the business. That is being done through the Unsolicited Marketing Communications (Company Directors) Bill that Patricia Gibson MP introduced in the House of Commons.
What is the estimated level of avoidance in Scotland?
Kevin Fraser
I do not have direct figures on that.
Kenneth Gibson
I am looking for parameters. If it is being avoided it will be hard to know exact amounts.
Kevin Fraser
There is one case that is going through at the moment where £2 million is at risk of being written off—that is for just one operation. There are not that many. I should stress that the vast majority of ratepayers are 100 per cent honest and we have no problem at all with them—they pay their dues when they are due. It is a very small minority who avoid paying, but the sums involved can be substantial.
Kenneth Gibson
Eileen Rowand talked about the fact that the new anti-avoidance measures would bring in more revenue than they would cost. To look at this another way, do you have any ballpark figures for how much additional revenue could be brought in through the new anti-avoidance measures? I realise that it is quite difficult to get hold of figures for people who are avoiding paying, but it would be good to understand how significant the new measures would be.
Eileen Rowand
We are well aware that it happens and that avoiders exist. At the moment, we do not have effective tools to tackle that, which is why we welcome the anti-avoidance rules that are being introduced. We cannot really put a figure on it. Individual authorities will have identified instances of avoidance over the past few years but, as you say, that is not the full picture.
Graham Simpson
The question around phoenix companies is interesting. Is it possible for us to get some kind of idea of the scale of the issue from the perspective of individual councils that have been unable to collect rates debts from companies because they have closed down? Do you have any examples that you can pass on to us?
Kevin Fraser
The scale is not huge. There are probably one or two that are known to carry on at any one time in each local authority area.
Morag Johnston
It can be quite difficult to identify a company as a phoenix company. Although we might see a pattern of a particular premise continually changing hands, the directors of the companies are often different. Although we may suspect what is going on, unless it is obvious that the directors are the same, it can be difficult to identify such companies.
Often, it depends on local knowledge. As Kevin Fraser identified, the name over the door might not have changed but, from our rates records, we know that there have been three or four different companies in place. That is where it can be difficult. In Glasgow, we have a rates base of about 28,000 properties. To give you some context, we are not even talking about hundreds of cases, but it happens and it is unfair for the ratepayers who pay.
Graham Simpson
Mr Fraser, it sounds like you are looking for an amendment to the bill.
Kevin Fraser
Ideally, yes. We are highlighting the fact that we need to look at the corporate veil or company liability and to deal with phoenix companies.
Kenneth Gibson
I had already taken a note of that, but I am sure that the minister will be listening.
Andy Wightman
A couple of questions ago, Jonathan Sharma mentioned a note that he had given the committee, but we have no written evidence from COSLA.
Jonathan Sharma
We expect the committee to have COSLA’s submission by the end of May. The council leaders will meet a week on Friday and I hope that the submission will be available immediately after that.
Andy Wightman
That is excellent.
Kenny Gibson raised the financial memorandum, and we have just talked about penalties. Perhaps I should know this, but do you receive the moneys from penalties or do they go to the courts administration?
Kevin Fraser
I understand that councils retain the moneys.
Andy Wightman
They come to the councils—that is fine.
The financial memorandum says that the administrative cost to local authorities, assessors and the Scottish Government will be £32 million and that the cost to ratepayers through NDR liabilities and potential penalties will be £68 million. Broadly speaking, do you accept all the figures in the financial memorandum?
Eileen Rowand
Yes.
Andy Wightman
You are broadly content.
The figures of £32 million and £68 million are dealt with in the summary table on page 21. Have there been discussions with the Government about baselining those costs? If councils are to receive £68 million over the next five years, have there been discussions about netting off the enhanced administrative costs that will arise? As a consequence of the bill, will councils be no worse off?
Jonathan Sharma
It has been made clear to us that there will be nothing forthcoming for any costs to councils as ratepayers. Councils will be expected to pay along with all other ratepayers—that is the message that we have had from the Government. We have made our point about the implications for ALEOs; some of that is captured in the financial memorandum.
Our councils provided the figures for the costs as ratepayers and the administrative costs. For the administrative costs and, in particular, the assessors’ costs, which are the biggest element, I have already stated that we welcome the funding for 2019-20 and that we expect full funding to be provided for future years. We will do a little more work on assessors’ costings and local authorities’ costings.
Andy Wightman
You are correct that the biggest single administrative cost—£29.1 million out of a total of £31.9 million—is for the assessors. Local authorities govern the assessors—the valuation joint boards are run by councils—and councils pay them. You want the Government to make sure that the costs of the £68 million of income from ratepayers are met from that £68 million and that you are left no worse off from having to pay your valuation joint boards £29.1 million to meet extra costs.
11:00Jonathan Sharma
We have to accept that there will be some costs to councils as ratepayers; there is no getting away from that. If there are ways to alleviate costs through charitable relief for ALEOs, the message that we want to get across today to the Government is, “Look—can we have greater flexibility on that?” That might bring down the costs to councils as ratepayers.
As I said, we expect all the administrative costs that have been identified to be covered through central funding.
Andy Wightman
I make it clear that I was not asking about the impact on councils as ratepayers, which is covered in the £41.9 million. I am merely asking whether you expect the £29.1 million—the biggest single administrative cost—to be covered.
Jonathan Sharma
In the discussions that we will have on refinement of the costs, we will expect the costs to be recognised—for example, in the next spending review.
Andy Wightman
Are you content with the financial memorandum’s assessment of the potential costs to ratepayers and the impact of those costs on, for example, independent schools and others that will have to pay more rates?
Eileen Rowand
It is hard for us to say that we can sign those elements off, as we have not necessarily provided the figures. We are happy to speak about the administration costs that have come through and been provided by local government, but the Scottish Government has worked on the other elements.
The Convener
On that note, I thank the panel for attending today’s evidence session on the bill. Further sessions will take place over the remainder of May and June. The committee will consider the evidence that has been heard later in the meeting.
11:02 Meeting suspended.11:04 On resuming—
22 May 2019
22 May 2019
29 May 2019
19 June 2019
26 June 2019
11 September 2019
What is secondary legislation?
Secondary legislation is sometimes called 'subordinate' or 'delegated' legislation. It can be used to:
- bring a section or sections of a law that’s already been passed, into force
- give details of how a law will be applied
- make changes to the law without a new Act having to be passed
An Act is a Bill that’s been approved by Parliament and given Royal Assent (formally approved).
Delegated Powers and Law Reform committee
This committee looks at the powers of this Bill to allow the Scottish Government or others to create 'secondary legislation' or regulations.
It met to discuss the Bill in public on:
5 November 2019:
Read the Stage 1 report by the Delegated Powers and Law Reform committee published on 26 June 2019.
Debate on the Bill
A debate for MSPs to discuss what the Bill aims to do and how it'll do it.
Stage 1 debate on the Bill transcript
The Deputy Presiding Officer (Christine Grahame)
The next item of business is a debate on motion S5M-19336, in the name of Kate Forbes, on the Non-Domestic Rates (Scotland) Bill.
15:54The Minister for Public Finance and Digital Economy (Kate Forbes)
I am pleased to open the debate on the general principles of the Non-Domestic Rates (Scotland) Bill, which was introduced to Parliament on 25 March 2019. I will set out the background to the bill and then move on to its substance, although I will keep my remarks short because I recognise that members want as much time as possible to offer their views.
The Government is committed to using the limited economic powers at our disposal to create a tax environment that supports economic opportunity. As Scotland’s second-largest tax, non-domestic rates plays a key role in balancing the need to deliver a competitive and sustainable taxation environment, while ensuring that we have sufficient resources to fund the public services that we all rely on.
The remit of the independent Barclay review was to ensure that the rates system supports business growth and long-term investment, as well as better reflecting changing marketplaces. The Barclay review made 30 recommendations. As our implementation plan outlined, we accepted the majority of the recommendations and have already made moves to implement them, including the recommendations on the business growth accelerator, which was warmly welcomed by the business community, and the fresh start relief to support town centres.
We said that we would introduce primary legislation by 2020 and the bill that we are debating today fulfils that commitment. The bill contains meaningful reforms to the rates system, with the notable inclusion of a three-year revaluation cycle. That has been welcomed by many, including the Royal Institute of Chartered Surveyors and the Scottish Retail Consortium, because it delivers justice by more closely aligning valuations with the market. The bill also gives new powers to assessors, local authorities and ministers to improve the administration of the system and to tackle tax avoidance.
A lot of hard work has been undertaken by a range of stakeholders prior to today’s debate. I pay tribute to the members of the Barclay implementation advisory group, the sub-groups that looked at billing and appeals and the working group that considered sports club relief guidance. Members of those groups have given, and continue to give, freely of their time to help ensure that these rates reforms—subject to the will of Parliament—can be implemented as efficiently and effectively as possible.
I turn to what is perhaps the most important area of the bill, which is the appeals system. Our proposed reforms to the appeals system are the most important and ambitious of the reforms that we are implementing, but they are also the most complex. If we fail to reform the appeals system effectively, we risk negating any benefit from all the other proposed rates changes.
I understand that the recent reforms to the appeals system in England have delivered a system that is bogged down in bureaucracy and red tape, resulting in possibly millions of ratepayers being unable to access a fair rates hearing. We must learn from that and make every effort to get our reforms right.
The report of the appeals sub-group, which was established to inform advice to the Scottish Ministers, was published today and offers views on the potential design of a new appeals system. I received the report this morning and a copy has been sent to the lead committee considering the bill. I look forward to reading the report and reflecting carefully on its contents.
It is fair to say that not all the provisions in the bill have been universally welcomed; I refer specifically to the removal of charitable rate relief from mainstream independent schools. I recognise that the independent school sector is a well-established part of the Scottish education system that promotes choice for parents. However, we agree with the Barclay review that the current difference in rates treatment between independent and local authority schools is unfair and must end. I stress unequivocally that that is a change to rating and not to charity law.
I am grateful to the convener and members of the Local Government and Communities Committee for their scrutiny of the bill at stage 1. I welcome the committee’s support for the general principles of the bill. This morning, I wrote to the committee to respond to the various issues that were raised in its report. I will comment briefly on some of those points.
I welcome the committee’s recognition that the bill’s provisions aim to address weaknesses in the current appeals system. I agree with the committee’s view that getting the detail of the new appeals process right will be critical in enabling the move to three-yearly revaluations. That is why I wrote to the committee on 3 September to say that, towards the end of this year, we will produce a set of illustrative draft appeal regulations, which will allow the committee and other stakeholders to see and comment on our detailed draft proposals.
The committee considers that fees should be introduced at both the proposal and appeal stage of the new appeals process. Although I have yet to reach a conclusion on the matter, I welcome the committee’s position and views. I will reflect further on the matter, and I am sure that I will also be informed by the comments of the appeals sub-group.
I will touch briefly on assessor and local authority information-gathering powers, on which the committee supports the bill’s overall direction of travel. It is important to say that the issue is not all one-way traffic. Assessors accept that they need to get better at providing information to ratepayers in the first place to help them better understand how the valuation assessment has been derived.
The committee’s report comments on the divergence of views expressed on some key issues, such as the level at which civil penalties have been set. We recognise that, and I look forward to further discussions on those important issues during the bill’s amending stages.
I will end there to give back some time to the debate.
I move,
That the Parliament agrees to the general principles of the Non-Domestic Rates (Scotland) Bill.
The Deputy Presiding Officer
Thank you—you caught me on the hop, there.
I call James Dornan to open on behalf of the Local Government and Communities Committee, as that committee’s convener.
16:01James Dornan (Glasgow Cathcart) (SNP)
I thank the Local Government and Communities Committee clerks and the staff from the Scottish Parliament information centre for all their support. I also thank the minister and the Scottish Government for their generally supportive response to our stage 1 report. Most of all, I thank the committee members—those who are presently on the committee and previous members—who worked hard to produce the report.
The committee began its scrutiny of the bill during the spring of this year. We took evidence at five meetings and our call for views generated a high volume of responses. The committee went on three visits. One visit was to an independent school and the other two were to Kilmarnock and Stirling high streets, where we met local businesses, charities and other employers to get a snapshot of local views on the rates system. The high level of informed engagement helped the committee enormously in our role of reporting to the Parliament on the general principles of the bill.
Turning to the report, I say at the outset that the committee unanimously endorsed the bill’s general principles. We took that position because of the clear support from diverse sectors—the public and private sectors and from business and the third sector—for the overall direction of travel.
I will single out two reforms for comment. The first is the proposal to speed up the revaluation cycle from five to three years and to bring the date at which revaluations are calculated—the tone date—one year closer to the date on which revaluation actually takes effect. Put simply, that means that, for those who pay rates, the amount that they pay should more closely reflect the actual current value of their property. It is hoped that that will result in fewer appeals against revaluations. Just about everyone agreed that there are far too many appeals at present and that they clog up the system, eating into the resources of councils and assessors. Appeals can take an extraordinary amount of time to resolve, which of course does not help ratepayers either.
The second reform that I want to mention relates to the appeals process. Those new provisions, too, were generally welcomed. There was a general consensus that the current system is unsustainable. However, the committee had some caveats of which the Parliament should be aware, and I will mention two. First, the switch to a three-year cycle will undoubtedly mean more work for assessors, and the profession already has a recruitment problem. That needs urgent attention, so we have asked the Scottish Government what plans it has to address the issue. Secondly, the new appeal provisions simply create a framework for a revised process but leave the details for later. The committee understands why the Scottish Government has taken that approach but, as the minister said, it means that the next steps will be crucial to ensure that we end up with an appeals system that is more efficient than the one that we have now.
I do not say this lightly—because the committee, like the Government, appreciates the importance of access to justice, especially for smaller enterprises—but, given the evidence that we received, we ask the Government to give careful consideration to introducing fees for appeals. I am delighted that the minister said that she will give the matter serious consideration. It became clear to us that the absence of fees is one of the primary factors contributing to a climate in which speculative appeals have become normalised.
The most contentious proposal is in section 12, which removes from most independent schools the right to claim mandatory charitable relief. I expect that issue to be widely discussed today, so my comments on it will be brief. The majority of responses to our call for evidence were about section 12; generally, they were from parents, teachers and, occasionally, young people with a direct connection to an independent school. They expressed their views with sincerity and strength of feeling, and set out their concerns about what they felt the change could mean for their school.
I want to mention the visit by committee members to George Watson’s college in June. I thank the college for hosting a discussion with representatives of the independent sector. As members will imagine, they put their views across to us forcefully, clearly and courteously; by the end of the meeting, the committee knew well where the independent sector stands on the issue.
However, it is important to be clear that there was a strong welcome for the proposal, including from councils. They shared Barclay’s view that the change would bring to an end an anomaly and help to level the playing field between independent and state schools. In the end, a majority of committee members were more persuaded by the latter point of view. The independent sector has been around for a long time and has always shown an ability to adapt to change. It did so last decade when the Scottish Parliament agreed reforms to charity law. Most of us believe that this is another change that the sector will adapt to.
I want to expand on the committee’s comment in its stage 1 report that the bill is “inevitably piecemeal”. That was not intended as negative commentary, but as a simple reflection on the fact that, of the 27 Barclay recommendations that the Scottish Government has largely accepted, most do not require legislative intervention. The bill is limited to those recommendations that do.
We should all take note that the bill is just one part of a wider effort to meet the Barclay goal of having a ratings system that is fairer, more efficient and more business friendly. Much of the evidence that we received was about the bigger picture beyond the parameters of the bill. The committee agrees that there is benefit in continuing the debate about how well the current rates system, including its supporting architecture of reliefs and supplements, reflects modern commercial realities.
To pick one example, we might ask whether there are aspects of the ratings system that could be re-engineered to address the problem of struggling high streets and to enable a town centre renaissance. Perhaps that is a discussion for another day, but we should keep the bigger picture in our sights over the coming months and years as we judge the effectiveness of the whole package of reforms that has emerged from the Barclay review.
Given the tightness of time today, I merely repeat that the committee welcomes the bill. I look forward to the rest of what will be a very interesting debate, particularly for the members of my committee.
The Deputy Presiding Officer
Members are all being very generous with their time. Mr Dornan had another minute, as did the minister, but there you go.
16:07Murdo Fraser (Mid Scotland and Fife) (Con)
I feel that I must reiterate some of the comments that I made this morning in the chamber about the timing of this debate, because we have been left with one hour and 20 minutes for a stage 1 debate on an important bill, which a large number of people outside the Parliament—stakeholders, businesses and those involved with independent schools—are concerned about. It is an issue that we need to address as a Parliament. The primary purpose of Parliament is to scrutinise legislation—we are here to make laws. We do many other important things, but they are not as important as that, and Parliament needs to learn a lesson about timetabling debates such as this one.
Having got that off my chest, I want to give a general welcome to the Non-Domestic Rates (Scotland) Bill. In some areas, it does not go far enough, and we have concerns about what is being proposed in other areas but, overall, its measures are welcome.
As we have heard, the bill seeks to implement the findings of the Barclay review on non-domestic rates. It does not implement all the Barclay review recommendations. For example, Barclay recommended a change in the tax treatment of arm’s-length external organisations—ALEOs—whereby local authorities provide leisure and cultural services by means of an independent vehicle, thus making a business rates saving. The Scottish Conservatives vigorously opposed the original plan to remove that tax concession and, last year, I was pleased when the Scottish Government announced that it would not proceed with the introduction of what we called the swim tax. I am proud of that particular slogan.
There is much in the bill that we welcome. We welcome the move from five-year to three-year revaluations, which is supported by the business community. All members will have had the experience of hearing the concerns of businesses about the increases in business rates through revaluations that are set five years apart. Although there is an appeal process in place, that has led to specific reliefs being introduced to deal with the changes arising from revaluations. Reliefs were introduced for the hospitality sector, for example, and for premises in Aberdeen and the north-east. A move towards a three-year revaluation schedule should reduce the demand for specific reliefs in the future.
The Barclay review’s proposals for a business accelerator, which would create an incentive for businesses to expand and remove the existing disincentive for speculative development by landlords, is also a positive step. The relief is intended to stimulate growth and investment and it is one that we very much welcome.
However, we have concerns about certain areas of the bill. The first is the fact that the date of the next revaluation is set at 2022, which leaves a five-year gap since the last one. It is at least worth exploring whether the next revaluation can be brought forward a year, to 2021, which would bring us into line with the situation south of the border. If it is technically possible, that move would be welcomed by business.
Kate Forbes
Will the member take an intervention?
Murdo Fraser
If it is brief.
The Deputy Presiding Officer
There is time for interventions, if you wish to take them.
Kate Forbes
Does Murdo Fraser accept that, in respect of the tone date, if we are to deliver all the Barclay recommendations, we must allow adequate time to implement the reforms correctly?
Murdo Fraser
I am sympathetic to that view, but I think that there is interest in the business community in exploring how achievable it would be to bring forward the date of the next revaluation.
The second area of concern is the tax treatment of independent schools. My colleague Liz Smith will say more about that later in the debate, but I will highlight three concerns that I have about the measure. First, there seems to be a degree of inconsistency in proposing the removal of a charitable relief from independent schools, which are constituted as charities and do not make profits—indeed many of them are in a precarious financial position—and, on the other hand, granting a new relief to private nurseries, which do make profits. There is a clear inconsistency, in that charities that are running a nursery as part of an independent school will have their relief removed, while other profit-making charities will have a new relief granted to them.
Secondly, the Office of the Scottish Charity Regulator has made very clear its strong opposition to what is being proposed. It stated in evidence to the committee that it has
“a long held general concern that treating any group of charities in a differentiated way for tax or other purposes, as proposed by the Barclay Review and now the Bill, introduces the potential for confusion in the minds of the public as to what it means to be a charity.”
If the Scottish Government wants to review the charitable status and tax treatment of independent schools, in my view, it should be doing so as part of a wider review of charity law, and not in the context of the bill. I know that my view is shared by OSCR.
Finally on this point, I simply cannot believe that the financial memorandum that is attached to the bill makes the assumption that there will be no additional cost to the public sector from introducing this tax grab of £7 million a year from independent schools. That money will be found only by increasing fees to parents, by cutting bursaries, or by a combination of both, which is bound to impact on the number of parents who choose to send their children to independent schools, which will put an additional burden on local authorities. That will particularly be the case in areas such as Edinburgh and Perth and Kinross, which I represent, where relatively high proportions of the pupil population are currently in the independent sector.
The last area that I will talk about is the large business supplement. The Barclay review recommended that the LBS, which is currently set at a rate that is nearly double that set south of the border, should be made competitive with the rest of the United Kingdom, to ensure that Scotland is the best place to do business. Barclay recommended that the LBS be reduced in 2020-21, or sooner if affordable.
It is disappointing that the measure is not addressed in the bill. We consistently hear from the business community that it is a major disincentive for businesses to invest in Scotland. In a parliamentary written answer that I received last week, it was revealed that there are more than 5,000 retail businesses in Scotland paying the LBS and cumulatively contributing nearly £14 million annually. It is a tax that is payable on business in Scotland and is not payable elsewhere in the UK. As David Lonsdale of the Scottish Retail Consortium stated in The Herald two days ago, it is a levy that
“sticks out like a sore thumb.”
I hope that the issue can be addressed either in the bill or separately.
We have therefore identified those three issues as problems with the bill. More generally, business rates continue to be a major source of complaint, and it remains our view that there should be a broader look at the business rates regime and business taxation. I was encouraged by the remarks of the committee convener that perhaps we need to consider whether a tax that is based purely on property values is still appropriate when so much business is conducted in cyberspace.
We welcome the bill overall. We have some reservations about it, but we will support it at stage 1 to allow it to continue through the parliamentary process, during which we will look to see how it might be improved.
16:14Sarah Boyack (Lothian) (Lab)
Non-domestic rates are a vital part of the funding that enables our local authorities to deliver the local services that people rely on. In the Local Government and Communities Committee’s evidence gathering in advance of this year’s Scottish Government budget, a key issue that was raised by witnesses was the financial cliff edge that local government faces. Therefore, ensuring that non-domestic rates are effective, that they enable funding for local services and that they are fair for our businesses and those organisations in the public sector that pay them is crucial.
Scottish Labour welcomes the broad thrust of the legislation, because it will make the system more effective and fairer in terms of its coverage. However, we believe that the legislation is a missed opportunity. It could have delivered more to incentivise culture change and address the challenges that our businesses and communities are facing.
The majority of the provisions in the bill are welcome: for example, the move to three-year valuations; the removal of charitable relief from independent schools; and measures to cut down on speculative appeals. However, the details of many of those areas will be left to Government to develop and implement after the bill has been passed, and their success will depend on consultation right across Government and with stakeholders, and on joint working with local authorities.
In some instances, the Government has given itself too much power and Scottish Labour believes that the bill should be amended at stage 2 to allow Parliament to scrutinise any further actions that are taken on business rates. Furthermore, we think that the bill represents a disappointing lack of ambition from the Government. It is limited to the scope of the Barclay review, which was itself too narrow.
I highlight that the bill should have engaged further with the current struggles that our high street is facing and evidence from the business community that aspects of the rating system deter growth. I particularly commend the representations of the Union of Shop, Distributive and Allied Workers—USDAW—to the minister. Those are worth taking on board.
Kate Forbes
Will the member take an intervention? It is a constructive one.
The Deputy Presiding Officer
Oh! Who could resist?
Kate Forbes
There are many recommendations from the Barclay review—ones that support the high street, for example—that have already been implemented because they do not need primary legislation. Is Sarah Boyack making the point that there is further work that we can do outwith the legislative process, or more that we can do that requires to be in the law?
The Deputy Presiding Officer
Ms Boyack, you will get your time back.
Sarah Boyack
We can do both, I think, and I thank the minister for her constructive intervention.
Another area is the urgent need for incentives for low-carbon investment. We urgently need to see new infrastructure for local heat and power schemes to create new opportunities for investment and to deliver new affordable low-carbon heat projects. Last month, Glasgow’s Councillor Anna Richardson made the point that
“the way district heating systems are treated in the local tax system acts as a deterrent to them being used more widely. Unfortunately, under present rules, installing district heating systems brings in significant new non-domestic rates and that adds unduly to the cost of heating homes.”
Her point is that homes that are heated by a district system are penalised in effect. How can it be right, when we need low-carbon community networks that are affordable, that there are disincentives that make them uncompetitive with the higher-carbon technologies that we are trying to move away from?
The Barclay review called for an examination of the effectiveness of the small business bonus scheme. I understand that work on that is now being carried out. It would be helpful to hear from the minister when that will be published.
There are key reforms that Scottish Labour supports. I have already mentioned moving property revaluations from five to three years; increasing the relief available to properties that have undergone improvement or expansion; reforming the appeals system to try to cut down on speculative appeals and enable earlier resolution; and removing charitable relief from most independent schools.
We also welcome sections 23 to 27, which give the Scottish ministers the power to introduce general anti-avoidance provisions for non-domestic rates. As the committee has noted, tax avoidance corrodes public confidence in the tax system and the shared sense that everyone plays by the same rules, especially when it is carried out openly and blatantly. We need to see clarification from the Scottish Government on whether it has considered the amendment of reliefs or the small business bonus scheme to ensure that we have an approach that prevents repeat offenders from acting, and we need to see what conclusions were reached.
We also want to see implementation of the change to the revaluation cycle from five to three years. That is a business-friendly change that, if implemented effectively, could also lead to a reduction in the number of speculative appeals against revaluation. A critical issue that has emerged is that the benefits of that proposal will be realised only if the Government has a plan to address problems of recruitment and retention in the assessor profession. That came through loud and clear in the evidence that the committee received.
We are also supportive of reforming the appeals process. The current system is unsustainable and leads to lengthy and resource-sapping backlogs that are not in the interests of ratepayers or administrators. We need more action to ensure that we have the staff to deliver the changes that are required.
The committee accepted that there is no good reason in principle why businesses in most public parks should continue to enjoy automatic exemption from the business rates regime. However, there are uncertainties about the scope of section 4 and how it will be implemented, and more clarity needs to be provided when we reach stage 2.
We agree with the committee that the ending of mainstream independent schools’ eligibility to claim charitable relief is to be supported. We believe that it is crucial that there is a level playing field for the state and independent sectors. The proposal will also generate more revenue for councils. We also support the intentions behind section 5, which seeks to close the loophole that enables some second home owners to avoid council tax and rates, and section 12, which seeks to address the problem whereby an empty property is purportedly being used for a particular purpose simply to allow relief to be claimed. There is much in the bill that we support, but more detail needs to be provided when we come to stage 2.
I want to end by commenting on the discretionary powers that are aimed at granting relief to sports clubs. It is good to see acknowledgement of the positive role of sports clubs in our communities, but there needs to be parliamentary scrutiny of the guidance that the Scottish Government intends to produce.
Given the range of issues on which further clarity is required, it is crucial that stage 2 is handled in a constructive way and that ministers can answer a lot of our questions. If that is not the case, there will be a great deal of uncertainty for business. There is much that we can support in the bill, but there are changes that need to be made and opportunities that can be taken.
The Deputy Presiding Officer
You must end there.
Sarah Boyack
I thank the witnesses who gave evidence to us and those who supported the committee’s evidence-gathering work.
The Deputy Presiding Officer
I call Andy Wightman to open for the Green Party.
16:21Andy Wightman (Lothian) (Green)
Thank you, Presiding Officer. Do I have five minutes or six?
The Deputy Presiding Officer
You have five minutes and a wee bit extra, but do not overplay your hand.
Andy Wightman
I will not. Thank you, Presiding Officer.
I note that this is the first time that the Scottish Parliament has considered primary legislation on non-domestic rates. Indeed, there has been no reform in more than a quarter of a century, since the Local Government Finance Act 1992. That is very telling. It demonstrates how little interest there has been in Parliament in local tax and how much power the 1992 act gave to the Secretary of State for Scotland—that power now lies with the Scottish ministers—in relation to detailed design of the non-domestic rating regime, including the rates themselves, the reliefs and other details, all of which are pushed through Parliament in secondary legislation. For a tax that, as the minister pointed out, is the second-highest-yielding tax under devolved powers, that is a remarkable state of affairs.
Therefore, the fact that we have a bill is welcome, but it is not welcome that it is so narrowly focused on a series of technical measures and that it leaves a vast number of questions unanswered. It is worth briefly reflecting on why that is. In September 2013, Derek Mackay—who was in the chamber a few moments ago—the then Minister for Local Government and Planning, published a response to a consultation document in which he said that the Scottish Government would
“conduct a thorough and comprehensive review of the whole business rates system”
by 2017, which would deliver
“a fairer, simpler and more efficient business rates system.”
That review never took place. Instead, we had the Barclay review, which asked only one question:
“How would you redesign the business rates system to better support business and incentivise investment?”
That is why OSCR, for example, never paid much attention to the review. It was only after the review had been completed that organisations such as OSCR suddenly realised that the findings had some relevance to them. The review was instructed on the basis that its recommendations would be revenue neutral. In practice, that meant that any proposals that were made to reduce liabilities in any way had to be balanced by measures that would make up for the lost yield. It is no coincidence that many of the measures that are in the bill to make up for the lost yield were plucked from thin air—the Government simply looked at a list of reliefs to find out where it could get the money to pay for the review’s recommendations.
The Barclay review was not the comprehensive review that was promised in 2013; that review has still to take place. It is in that context that Green members approach the bill. I will outline our key objections and proposed reforms before concluding with a more fundamental objection. At stage 2, Green members will lodge amendments, on all of which I undertook a consultation in the summer recess. I will say a few things about some of them.
First, members will be aware that non-domestic rates are a local tax, and yet, in 1992, Mrs Thatcher’s Government removed councils’ powers to set the rate. Since then, the rate has been set by negative instrument with next to no parliamentary scrutiny. We will lodge amendments to return the rates to the level of government to which they belong—local government. There will be issues of timescales and all sorts to debate in relation to that.
Secondly, it is bizarre that we have an incomplete tax base. Barclay recommendation 28 is that all property should be on the valuation roll and those currently exempt could then be granted reliefs, which would increase the transparency of, for example, the unjustifiable tax breaks afforded to agricultural holdings.
That recommendation was made as far back as 1976 by the Layfield committee, the Mirrlees review drew Government’s attention to the issue in 2011 and the land reform review group made a very clear recommendation on that topic in 2014.
In the past two years, more than 13,000 new entries have been added to the valuation roll, to cover shootings and deer forests. The vast majority of those will be registered agricultural holdings. We are well on the way to a complete roll, and we should commit to completing the task.
Thirdly, the non-domestic rate is a flat-rate tax—it has one rate of 49p or thereabouts—that is applicable to all properties, regardless of their value. We propose that there be a progressive rate, with a tax-free allowance, just like we have for income tax.
Other changes that we will be seeking include either removing the exemption that is granted in the bill for specialist music schools that are in the private sector, or retaining it but also applying it to the four specialist music schools that are in the public sector, such as the City of Edinburgh music school.
We also want the localisation of reliefs, and the provision of backstop powers to force owners to pay, rather than forcing occupiers to pay where the owners cannot be found. We also want there to be reforms to stop multibillionaires such as Sheik Mohammed bin Rashid Al Maktoum, the ruler of Dubai, being eligible for the so-called small business bonus scheme, and to ensure that all ratepayers pay something, which would eliminate what Barclay calls the “rates deserts”.
We have one major concern: the removal of the NDR tax base from the control of its historic owners—local government—is, in our view, a violation of international law. That breaches article 9 of the Council of Europe’s European Charter of Local Self-Government, which provides legal protections for the autonomy of the tax base of the local state. This situation cannot be allowed to persist. However, because it does—at the moment, anyway—we cannot support the bill; neither will we stand in its way, so the Greens will abstain on the motion this evening.
The Deputy Presiding Officer
I call Liam McArthur to open for the Liberal Democrats. You also have a generous five minutes, Mr McArthur—that is so that I am fair to everyone, as I always am.
16:27Liam McArthur (Orkney Islands) (LD)
As you always are, Presiding Officer—thank you very much, indeed.
I, too, thank James Dornan and his colleagues on the Local Government and Communities Committee for their work to date; I also thank those who contributed to the consultation.
I find myself in agreement with Andy Wightman’s analysis and many of his concerns. The bill includes a set of fairly modest proposals stemming from the Barclay review. That, too, was hobbled in terms of its breadth and its scope. We have been left with a bits-and-pieces bill.
I understand that we are dealing with a policy area that is uncomfortable territory for this and previous Governments. I remember well the business rates revaluation in 2010, which left many businesses, particularly in the hospitality sector, facing massive increases of up to, I think, 1,000 per cent in some cases, with no transition. At the time, ministers seemed largely unconcerned, and they were not concerned enough to delay the revaluation until 2016. In the bill, however, we see the imperative for having regular revaluations.
After 2010, we had the business rates incentivisation scheme, which got off to a fairly inglorious start. The Government and the Convention of Scottish Local Authorities were still arguing in 2014 about what the baseline for 2012 should be and about what the outcomes, performance and payments for any year should be.
Eventually, ministers had to fiddle the figures, short-changing Aberdeen to the tune of millions of pounds. Then they cancelled the scheme anyway. The risk in trying to fake localism is that more of a mess is created. I would rather this bill set about giving control of business rates to local authorities, for many of the reasons that Andy Wightman set out, which would give them the opportunity to form meaningful and strong partnerships with businesses in their area.
Linking to the existing roles in economic development and to business support into local colleges, each authority would have the clout to shape a more successful community. I accept that the same economic and taxation blueprint does not necessarily work in every region, and the bill does not provide for that.
The Scottish Government is scrabbling around to work out how to avoid taxing people who improve their properties, invest in machinery and install renewable energy. All those issues are inherent problems in the business rates system, and it is fundamental that the system be based on rental value.
Andy Wightman
This might seem to be a pedantic point, but the member has persistently referred to “business rates”. He and I are members of the Scottish Parliamentary Corporate Body, and I do not think that he regards us as business people in that respect. I have just looked it up and found that this building has a rateable value of £6,965,000. The non-domestic rating system is a rating system of the occupational value of non-domestic property. Conflating the system with the interests of business has been damaging to the debate that we have had over the past decade. I am sure that the member agrees with me.
The Deputy Presiding Officer
It is all right, Mr McArthur—you will get your time back.
Liam McArthur
I am happy to take Andy Wightman’s reprimand in the spirit in which it was intended. Having been a member of the corporate body for some eight years, I certainly bear the scars of the impact of the non-domestic rates of this building.
The issues that I mentioned are not tackled in the bill, which is why the Scottish Liberal Democrats believe that a move to a land value system could generate economic advantages and Government efficiencies, if it is linked to council tax reform. However, we do not have a major bill before us; we have a small bill.
Scottish Lib Dems hope that the bill, if it progresses, will close the loophole that allows second home owners to declare themselves a business and get rewarded with a Government tax cut. Willie Rennie has spoken strongly about concerns that holiday rental owners in parts of the east neuk of Fife are not paying their fair share.
Some of the consultation responses are right to point to the large burden that will be placed on local authorities to police the bill’s provisions, as they are currently worded. The respondents suggest making changes to the small business bonus, and I hope that the minister will respond to that. I would like to know how the review of the small business bonus and the review of micro-letting will impact on the ground. The Scottish Government has chosen one approach in the bill, while embarking on two reviews of two other approaches. Ministers are not so much putting the cart before the horse as setting three carts rolling downhill, all of their own accord. I would be interested to learn what timetable the Scottish Government thinks will best allow the three processes to be considered together.
I wish James Dornan and his colleagues on the committee all the best as they take forward their stage 2 scrutiny of the bill.
The Deputy Presiding Officer
We move to the open debate. I ask for speeches of a generous four minutes.
16:32Kenneth Gibson (Cunninghame North) (SNP)
I agree with Liam McArthur about the loophole in relation to second homes.
The bill will update Scotland’s non-domestic rates system and create a more modern and equitable ratings structure. In terms of revenue, non-domestic rates are the second most important devolved tax, behind income tax. In 2018-19, non-domestic rates accounted for £2,847 million; by comparison, last year’s council tax income was £487 million less than the revenue from non-domestic rates.
The Barclay review outlined 30 recommendations that were intended to make the ratings system fairer, make the ratepayer experience better and enable economic growth. I am pleased that the Scottish Government accepted the majority of the recommendations—not least, the one on three-year revaluations—and acted decisively to implement those that do not require primary legislation.
The business growth accelerator should be welcomed across the chamber. Under the current system, when a new property is built, or when an improvement or expansion of an existing property takes place, the rateable value increases. A key business objective is to grow, which is often done by improving or extending premises, but a property expanding so that it had a rateable value of £15,001 to £18,000 would result, in effect, in a payment of rates at 36.75 pence in the pound, and 49 pence in the pound if the rateable value was more than £18,000. Therefore, if the rateable value is £15,000, nothing is paid, but if the rateable value is £18,001, £8,820.49 is paid. That cliff edge can only inhibit expansion and dissuade owners from taking long-term growth decisions due to cost. The Barclay report stated that that
“penalises ratepayers who make environmental improvements (e.g. solar panels), face requirements to improve their properties as a result of regulation ... or invest in plant and machinery.”
Although the small business bonus scheme is not being considered in the bill, its positive impact in saving businesses from going under during a recession could be improved, to allow businesses to not only survive but grow. The Federation of Small Businesses has said that repeatedly.
In addition, the demand for small business premises, which benefit from the small business bonus, has led to overheating in the rental market for cheaper properties. That incentivises companies to take their business away from high streets, where costs are usually higher. The business growth accelerator will incentivise investment and growth, introducing a 12-month delay in rate increases when an existing property is expanded or improved. Entirely new properties will become liable for rates only after 12 months. I agree with Murdo Fraser that if the UK Government were to consider taxing online retailers, that would also help our town centres and shops.
The bill includes provision for reforming the rates revaluation appeals system to reduce speculative appeals and to enable earlier resolution. In 2017, 75 per cent of appeals resulted in no change to specific rateable values. Therefore, I welcome the committee’s conclusion that the existing system incentivises the making of appeals. That is primarily due to no fees being charged for appeals and the ease with which appeals can be lodged. Accordingly, I believe that an applicant who has initially been advised that an appeal has little chance of success should have a fee imposed to militate against the lodging of a spurious appeal.
Independent schools with charitable status are currently entitled to 80 per cent mandatory relief from non-domestic rates. I agree with the majority of committee members, who considered that all independent schools should pay rates and should no longer be able to claim charitable relief. Not only would that end an unfair and unequal practice in relation to state schools; it would generate more revenue for councils to spend on local services. I simply do not accept that independent schools would suffer, because the impact on fees would be only around 1.3 per cent across the sector—far less than that of recent teachers’ salary and pension changes. I believe that that approach should apply to the entire independent sector. It is simply anomalous and inconsistent to exempt one music school from paying rates.
Scotland has the most comprehensive package of rates relief in these islands, which is worth more than £750 million in the current year, and more than 90 per cent of properties pay a lower poundage compared with those in the rest of the UK. The bill puts us on track to achieve our goals of improving our non-domestic rates system, helping businesses to grow and encouraging long-term investment.
16:36Liz Smith (Mid Scotland and Fife) (Con)
I place on the record that I have been a governor of two independent schools.
I agree whole-heartedly with my colleague Murdo Fraser, who earlier in the debate raised Scottish Conservatives’ very serious concerns about the element of the bill that will affect independent schools. We will need to see that being changed before we can agree to the bill at stage 3.
I entirely agree with what Andy Wightman said about there being serious anomalies in respect of treatment of specialist music schools.
I also want to pick up on the point that James Dornan made about the Charities and Trustee Investment (Scotland) Act 2005 on reform of charity law. At the time of that act’s passage, some members believed that no independent schools should have charitable status, because they felt that such schools were elitist, so that special treatment should be removed. However, when the bill was voted on, it was passed unanimously because all parties agreed that the evidence that had been presented to Parliament showed that independent schools play a very valuable role, regardless of whether it was measured by educational, social or economic criteria. It is good to hear the minister agreeing with that.
The other point about the 2005 legislation is that Parliament also agreed—again unanimously—that the charity test should be tightened so that all independent schools were made much more accountable in respect of the public benefit that they offer and, crucially, that they were made much more accessible. That is an important point to remember, because it is relevant to the debate on the current proposals to remove charitable relief from such schools.
Fees in the independent sector will, unquestionably, rise by more than has been the current average annual fee increase, thereby increasing the likelihood that more parents will be unable to choose independent education. In turn, that will mean that the state sector—which is already very hard pressed when it comes to resource provision—will be asked to accommodate more pupils. The second part of the equation is that, by definition, that would then cause independent schools to become more elitist.
James Dornan
Will the member take an intervention?
Liz Smith
If James Dornan does not mind, I will not take his intervention because we are so short of time.
As I mentioned earlier, that is surely the exact opposite of what the Parliament unanimously decided in 2005 and of the Scottish National Party’s stated ambitions for education in Scotland. It would also put Scotland’s independent schools at a competitive disadvantage compared with those in England.
Also, does Parliament really want availability of independent schools’ facilities to be restricted because they will face much more serious financial constraints? Does it want one in which independent schools are no longer quite so able to offer assistance to state school pupils to study subjects that are not in their own schools’ curriculums or are unable to support local primary schools with arts, drama or sports provision?
Does the Parliament want a situation in which the independent sector is not so able to contribute to the target of 1,140 hours of nursery provision, or not so able to provide marking assistance for the Scottish Qualifications Authority, as was stated in one of the warnings that was issued to the committee?
Those are all possible scenarios, each of which would serve to undo all the excellent work that has been done by both state and independent schools to bring the sectors together to enhance education for all young people.
Worst of all, does the Parliament really want a situation whereby some smaller independent schools would close down altogether, which would adversely affect employment in local businesses as well as among their own staff? The Local Government and Communities Committee has been well told that that is a real risk.
There are some serious anomalies in the bill, and I do not think that the Scottish Government has thought them through. We will bring up those issues at stage 2. I am sorry that they have not been thought through, as is evidenced by the fact that there has been no accurate assessment of the effects of the bill. No assessment has been forthcoming in the financial memorandum, which says nothing about the true costs.
Kate Forbes
Will the member take an intervention?
Liz Smith
I am just about to close.
The Deputy Presiding Officer
The member is closing.
Liz Smith
The Scottish Government must review the situation. If that is not done, that will give a completely one-sided and biased view. Those are serious objections, so we will review the matter at stage 2.
16:41Alex Rowley (Mid Scotland and Fife) (Lab)
First, I apologise for being a few minutes late to the debate.
The committee’s report captures many of the key issues that were raised by people who gave evidence and submitted their views. I congratulate the committee’s convener and its members. I am pleased that the committee has focused on the concerns that were raised about the transparency of the revaluation process. It is ridiculous that, as many businesses do, a business would struggle to understand the process, and to understand how revaluation of its property has been done. The process for revaluations should—indeed, must—be totally transparent. If it is too complex and difficult for the majority of people to understand, it is clearly failing and should be challenged. I hope that we will see a culture change that puts people, and the need for them to understand the process, at the heart of revaluation.
In its report, the committee states:
“We also note widely shared views that the more transparent and intelligible the revaluations process is, the fewer appeals there will be, and invite the Scottish Government to confirm whether it sees opportunities, as the Bill continues through the Parliament, to ensure that the process will be more transparent in future.”
Whether the process is intelligible or unintelligible, we surely need to address that issue. From my experience of dealing with businesses in Fife, I can see that there has been no commitment to explaining properly how evaluation is done. That needs to change.
On staffing, many people in valuation talk about the pressure of work and the fact that while staffing levels are falling through pressure from cuts, the workload is increasing. I am pleased that the committee identified that point, and I look forward to hearing how the Government intends to address the workload pressures that contribute to retention challenges in particular. The move to three-yearly revaluation is welcome, but the committee asks what additional pressures that will put on an already overstretched service.
It is important to restate what the committee said about modernising the system for administrating revaluations and appeals. It said:
“We welcome the small steps taken so far in the Bill but urge the Scottish Government to seize the opportunity to consider further ways to streamline and modernise the process.”
I hope that the minister will pick up on that point, and on the many other well-made points in the committee’s report.
On arm’s-length organisations, I think that all members welcome the decision not to proceed with the Barclay recommendations. In reality, the recommendations being implemented would have led to massive pressure on services, and many council services that have been put into ALEOs would have collapsed.
However, the Government needs to clarify whether it is introducing a new policy that ALEOs that are being set up would not qualify for the same relief as the current ones do. I know from having been council leader at Fife Council about the pressure on the education department from many people to make cuts by making savings from putting all the schools out to an ALEO. Where would that stop? The Government recognises that there is a problem, but it needs to state clearly what its policy will be and give local authorities a clear understanding of that.
Once again, Presiding Officer, I apologise for being late for the debate.
The Deputy Presiding Officer
Thank you very much, Mr Rowley. You are a true gentleman.
16:45Joan McAlpine (South Scotland) (SNP)
I welcome the bill, but before I comment on it in detail, it is worth reminding members that under the SNP Scottish Government Scotland leads the way on rates relief. Scotland already has the most generous package of reliefs in the UK, which is worth more than £750 million in 2019-20, and more than 90 per cent of properties in Scotland pay a lower poundage than other parts of the UK this year.
Andy Wightman
Joan McAlpine mentioned the generous package of reliefs. Why does she think that Sheikh Mohammed bin Rashid Al Maktoum, who is one of the richest men in the world, qualifies for the small business bonus scheme on his estate in Kintail?
Joan McAlpine
I do not know anything about that gentleman’s property, and it would not be appropriate for me to comment on the details of someone’s personal tax affairs without looking into the matter further. However, I will certainly go away and do that.
I am pleased that the Scottish Government has already acted decisively to implement the Barclay review recommendations that do not require primary legislation. Those include expanding fresh start relief to help town centres, which is very important to my constituents in the market towns of South Scotland.
The bill reflects the Barclay review’s recommendations that are intended to overhaul and modernise the ratepayer’s experience of navigating the system, which was judged to be poor, in order to increase fairness and, of course, to promote economic growth.
The bill will put in place ambitious reforms to the appeals system, which will improve decisions and build trust. The new two-stage appeals system will facilitate better and earlier information sharing, and it will enable a “right first time” valuation in order to reduce the number of changes on appeal, and to build trust in the system.
The Barclay report acknowledged the
“strong consensus among stakeholders that 3 yearly revaluations ... would provide a better timeframe.”
I note that the briefing for the debate from the Union of Shop, Distributive and Allied Workers says:
“We believe that these changes will ensure that the rates system better reflects market/trading conditions and provide a more effective ‘natural stabiliser’ against cyclical economic effects as well as economic shocks.”
I want to say something about the measures in the bill that are aimed at tackling tax avoidance, with regard to empty properties in particular. Empty property is one of the biggest problems that we face in urban and rural regeneration, so I welcome the attention that has been given to the matter by Barclay and the bill. For example, it was suggested to the Barclay review that a well-known avoidance tactic to reduce an empty property’s rates liability is to occupy only a small part of the property as storage. That allows the owner to qualify for another relief or allows a new period of empty property relief to begin after a set period.
Section 12 of the bill deals with the first of those aspects. I will watch closely to see how that works in practice. I understand that the second aspect will be dealt with through subordinate legislation. Either way, it is important that councils use the new powers to tackle the scourge of empty property and, indeed, that they use the powers that they already possess to deal with the problem.
I note that Barclay recommended reform
“to restrict relief for listed buildings to a maximum of 2 years and the rates liability for property that has been empty for significant periods should be increased.”
The Government’s consultation said that, after two years, relief should fall to 10 per cent and that a surcharge should apply after five years, from 2020.
That would deal with a problem of which I have direct experience. I have been approached by constituents in the town of Annan who are directly affected by listed buildings that have been left to crumble. I pay particular tribute to William Hogg, who is a local resident. He led on a petition that asked for action to be taken on properties including the Albert hall, the Central hotel and Erskine church. Because I was not on the committee that scrutinised the legislation, I am unable to ascertain whether that Barclay recommendation on listed buildings will be enforced through the bill or through regulations. However, I note that the consultation proposed that it would take effect from this year, so I hope that the minister can confirm that that is the case.
16:50Alexander Stewart (Mid Scotland and Fife) (Con)
I am pleased to take part in today’s debate on the Non-Domestic Rates (Scotland) Bill.
As a member of the Local Government and Communities Committee, I thank all those who have supported us during our evidence sessions and given us information.
As a former councillor, I am aware of the impact and importance of non-domestic rates. The Conservatives welcome many parts of the bill. However, we also have to think of the consequences that councils are suffering because of the budget reductions from Government. In this financial year alone, they have already had a real-terms budget cut of £168 million. The Scottish Government is making political choices, and that is the context in which we should see the bill. Many changes are proposed; some go far but some do not go far enough and will not address the chronic underfunding of our councils.
Scotland has one of the lowest growth rates of any country in the European Union and a lower employment rate than other part of the United Kingdom. If Scottish employment had grown at the same rate as the UK’s over the previous 10 financial years, more than 300,000 more people would be in work in Scotland today. That is a staggering and sobering statistic.
On our high streets, retail has been hit particularly hard; Scotland continues to fall behind the rest of the United Kingdom. The committee visited some locations and it was harrowing to hear views from retailers about how they cope with the demands in city centres.
There has already been talk this afternoon about online businesses. As we go forward, they need to be looked at.
When we looked at the amounts that are being ploughed into rates, we found that the hotel and hospitality sector are finding the situation difficult. The renewables sector is also suffering. In Aberdeen and Aberdeenshire, the Government had to support businesses because their rates bill had doubled, trebled or, as we heard, gone up by 1,000 per cent. It is unsustainable for businesses to be put in that situation. I am delighted that the Scottish Conservatives were one of the groups that forced a U-turn, as a result of which £40 million was put into the hospitality sector in Aberdeen and Aberdeenshire.
Andy Wightman
Alexander Stewart has gone on at length about the situation in Aberdeenshire. Does he agree that it would have been better for Aberdeenshire to have had the powers in Aberdeenshire to deal with that problem years before it happened or shortly after it happened, rather than having had to come to central Government, in the national Parliament, to invoke a complex relief scheme?
Alexander Stewart
We have to balance the economy and ensure that there is growth across the sector. I hear what Mr Wightman is saying but I do not agree with it completely.
We know that the Government has looked at the Barclay review’s recommendations on revaluations. One of the biggest benefits will be that revaluations will take place every three years rather than every five years. That is important.
It is disappointing that, despite the long-standing promises to reform business rates, there is no firm timescale to reduce the large business supplement, which means that Scottish businesses are uncompetitive.
Kate Forbes
Will the member take an intervention?
Alexander Stewart
No. Time is pressing.
When he was Cabinet Secretary for Finance and Sustainable Growth, the current Deputy First Minister acknowledged that. He said that the SNP Government was
“committed to setting the poundage rate no higher than that set in England”.
However, seven years on, we have still not caught up with that. The commitment rings hollow.
We have already discussed the independent schools sector. I come from Mid Scotland and Fife, which has a large number of independent schools. I echo the concerns of my colleague, Liz Smith, on the proposal to remove their charitable relief. The comparison with the rates that state schools pay is misleading; it is only cycling money through different parts of the public sector. That should not in itself be looked upon as an area for discussion.
As my colleagues have indicated, we will support the general principles of the bill, but we have missed some opportunities to make progress and improvements. The bill fails to take Scotland’s business forward in a competitive way, and it does not give us the system that we want. We will support the general principles of the bill at this stage, but we will be seeking to amend it at stages 2 and 3.
16:55Rhoda Grant (Highlands and Islands) (Lab)
We welcome the bill, as do organisations such as the Scottish Retail Consortium and USDAW. We will support the bill at stage 1, and we will seek to work with the Government and colleagues to improve it as it goes through the Parliament at stages 2 and 3.
We welcome the powers for Scottish ministers to introduce general anti-avoidance provisions for non-domestic rates. As Sarah Boyack said and as the Local Government and Communities Committee noted,
“Tax avoidance corrodes public confidence in the tax system”.
We need to see tax as a good thing: our contribution towards building a better society. Tax avoidance is often seen as something that should be promoted and, in some instances, tax evasion is encouraged.
Kenneth Gibson spoke about having to deal with the whole tax system. When we see large companies offering miniscule amounts of money in lieu of their tax liability, that devalues the whole of the tax system. Indeed, it encourages others to avoid paying the tax that they are due to pay.
We agree with the committee about the change to end the exemption for mainstream independent schools that claim charitable relief. That is very much welcomed by us, as it creates a level playing field between the state and independent sectors. As many members have said today, that will give local authorities more funding. Along with the committee, we are not persuaded that there is a case for treating independent specialist music schools any differently from other independent schools.
Liz Smith
Would that case not be enhanced if there was a much more detailed financial memorandum?
Rhoda Grant
Indeed. There needs to be more detail on many aspects of the bill. As far as independent schools go, this matter has been a cause for angst for some time, and it is important that independent schools are treated the same as other schools and are not allowed rates relief based on charitable status. While there are independent schools providing specialist musical tuition, there are the same types of schools in the public sector, such as Scotland’s national centres of excellence. I should perhaps register an interest, as I am a former pupil of Plockton high school, which is now a centre of excellence in traditional music. It was not when I was there—and I cannot sing a note, so that is perhaps just as well. In any case, we will consider lodging amendments to strengthen that part of the bill.
Murdo Fraser spoke about further clarity being required on private nurseries, including those attached to independent schools. That is something that the Government needs to provide.
Alex Rowley talked about ALEOs and how they were used by councils that were often cash strapped in order to save money. We need to ensure that that does not backfire on councils at a time when their funding is reducing.
Many members spoke about revaluations and welcomed the change to the revaluation cycle from five years to three years, which will reduce the lag between the date at which the market value is calculated and real-time market conditions for business premises.
Alex Rowley spoke about simplicity in the system, which could lead to much fewer appeals if there were better explanations as to how revaluations were carried out. He also talked about recruitment and retention of assessors. If the cycle is to be reduced, we need to have adequate people in the system who will provide the valuations required. That means ensuring that people are trained, and that we treat those who carry out the work properly so that we can retain them. Many speakers welcomed the reforms to the appeals system.
As Sarah Boyack said, the bill could have engaged further with the current struggles on our high street. It is also a missed opportunity to examine ideas for local devolution, and the scope of rates relief to drive up things such as environmental standards—Sarah Boyack talked specifically about district heating systems—employment standards and the real living wage.
Derek Mackay
Will the member take an intervention?
Rhoda Grant
I am sorry, but I think that I am in my last seconds.
To quote Paddy Lillis of USDAW,
“The retail sector needs urgent action to protect these essential jobs which are a key part of our communities. Business rate reform is a central part of this, but a fundamental review of support for the sector is needed if we are to save our high streets from further decline.”
17:00Graham Simpson (Central Scotland) (Con)
I start by echoing the initial comments of my colleague Murdo Fraser expressing frustration at the truncated time that has been given to the debate. Although there have not been many members in the chamber, a lot of people are interested, and it is a very serious piece of legislation that affects a lot of people.
Moving on from that, I thank the committee clerks for their work on the stage 1 report, as well as my fellow committee members, James Dornan, Sarah Boyack, Annabelle Ewing, Kenny Gibson, Andy Wightman and my good friend Alexander Stewart, who spoke with his usual passion.
The rates system is fiendishly complicated, archaic even, ludicrous at times, and difficult for most people to comprehend. As the FSB said in evidence, only about two fifths of business owners believe that they understand how their rateable value is calculated. That the system has been in need of a shake-up for a long time is not in doubt. However, the bill does not do that. It is a missed opportunity.
True to form, the Government set up a review, which means that it can blame someone else—in this case, Ken Barclay. Unfortunately, the mild-mannered Mr Barclay had his hands tied by a very narrow remit, which told him to make recommendations that were revenue neutral. It is my belief that that instruction led his team to make their most controversial recommendation, on independent schools—though they would deny that.
Kate Forbes
The member of the committee took evidence from Ken Barclay. The idea that he was forced to set recommendations just to balance the books is ludicrous.
Graham Simpson
Well, he was told to balance the books. That is a fact, and it is my view that it led to the recommendation.
Much of the bill is not controversial. [Interruption.] It is sensible, even.
Derek Mackay
It is about fairness.
Graham Simpson
I am glad that the cabinet secretary is enjoying my contribution.
Derek Mackay
Will the member take an intervention?
Graham Simpson
No—perhaps later.
There are some good ideas in the bill: changing revaluations from every five to every three years; reforming the appeals system; making reforms to close a known tax avoidance tactic for those who own holiday homes, which can be used to avoid paying any local tax on the property; introducing the business growth accelerator, which will reduce the rates bills of growing firms; and making those who conduct commercial activity in parks liable to pay business rates. However, there is nothing about dealing with the large business supplement which, as Murdo Fraser pointed out, puts businesses in Scotland—
Derek Mackay
Will the member take an intervention on that point?
Graham Simpson
Yes.
Derek Mackay
Just out of curiosity, if it so happens that such a policy is affordable, would the Conservatives vote for a budget that reduced the large business supplement?
Graham Simpson
Dear me, dear me. We will have to see the entire budget to answer that question, and we will have to see what the Government is doing to councils and whether it will slash their budgets again.
There is another missed opportunity to do something about high streets, which is something that we could consider at stage 2.
I said that much of the bill is uncontroversial, but one section has proved anything but, and has attracted the most comment. That is, of course, the section that takes away reliefs for independent schools. Liz Smith spoke with great authority on the matter. Out of a total of 367 submissions, more than 300 were on the issue of the taking away of rates relief and most of those came from concerned parents, teachers and pupils. We as a committee took evidence and we even visited the independent school George Watson’s College, in Edinburgh. However, the die was cast on the rates relief removal issue before anyone contacted us, before we heard a word and before we stepped across George Watson’s impressive portal.
Parties have positions, which means that some people just do not like the idea of parents having the choice to pay for their children’s education. However, I prefer to go with the evidence, which was overwhelmingly that independent schools are charities, that all charities benefit from rates reductions and that to meddle with that arrangement is meddling with charity law. How can we attack one section of the charity sector without looking at the whole sector? It is a policy born of prejudice and spite. The Scottish National Party has not gone quite as far as Labour, with its aim of abolishing all independent schools, but removal of rates relief is the thin end of the wedge.
I did not know a great deal about the independent schools sector before scrutinising the bill, but what I found was a sector that is proud of its charitable status, proud of its work to widen access to its schools’ facilities, proud of helping the disadvantaged and proud of having schools that are part of their communities. I visited Hamilton College in my region, whose building is that of the former Strathclyde teacher training college. Hamilton College is not a fabulously wealthy institution and, from what I could see, many of its facilities lag way behind those of schools in the state sector—elitist it is not. However, Hamilton College takes its charitable status very seriously, not to avoid paying rates but as a mission. It rents out its facilities and has a pool that swimming icon Michael Jamieson uses for his swimming academy. He is elite, but he is not elitist. Do we really want to put that type of endeavour at risk? As we have heard, the Office of the Scottish Charity Regulator made some damning comments about the bill’s proposal.
There was a proposal to make one exception to amending the status of independent schools and it involved specialist music schools. However, there is only one such school in the sector: St Mary’s Music School in Edinburgh. There was no logic to that proposal and I wonder what or who lay behind it.
There will be amendments at stage 2. We are open to ideas. We will work with other parties and outside organisations to improve the bill. We will work with the minister, if she is willing to be flexible.
17:07Kate Forbes
I applaud and thank the members who have defended the timescale given to this critically important debate. As somebody who has been heavily involved with the bill, I believe that the more time given to it, the better.
Quite a number of points have been raised in the debate, but I will try my best to get through them. However, there is an open invitation to other parties to discuss any element of the bill in advance of amendments at stage 2.
James Dornan, the committee convener, referred to the broad welcome for three-yearly cycles. That in itself will resolve a lot of the challenges that we see in the appeals system. To address a point that was made by both James Dornan and Alex Rowley, I say that we need to both solve the appeals challenges and ensure that assessors are as well supported as possible. That is why we included £2.5 million in this year’s budget to go directly to assessors; that was the figure that they identified as the support that they needed this year and which they welcomed.
Murdo Fraser mentioned the business desire to see a tone date here that is in line with that of the rest of the UK. There are questions around the tone date for the rest of the UK because of the prorogation of Parliament, although I think that the bill to set the tone date there at 2021 is back in play. However, assessors were clear with us, and I believe that they were clear with the committee, that if we want to deliver the bulk of the Barclay recommendations and get things right, we need the timescale that is being proposed.
As I said in my opening remarks, the provisions are not about charity law or the important role that independent schools play. Liz Smith spoke about the financial impact, but that was assessed in the business and regulatory impact assessment.
Liz Smith
The financial memorandum does not, as it should do, give a fair and balanced view of both the costs and the benefits.
Kate Forbes
It was included in the BRIA. I find it difficult to accept that the magnitude of change that has been identified would be sufficient to lead to a mass exodus of pupils. The impact of our proposals is equivalent to a 1.3 per cent increase in current average fees. That is a small increase compared to the average yearly fee increase of 4 per cent. That is why the financial memorandum is as it is—we do not believe that the policy change will result in a mass exodus of pupils to the public sector.
On any potential movement, some of the calculations that have been flying around use the average cost of a school pupil, whereas they should use the marginal cost. In the majority of cases, the marginal cost of a pupil moving from the independent sector to the state sector would be zero. Even if 3 per cent of pupils were to transfer, we do not accept the suggestion that that would leave the policy revenue neutral. The financial impact has been considered through the BRIA.
I will move on to the other points that were raised. Sarah Boyack talked about the importance of guidance, and I agree with her on that point. I will endeavour to provide the committee with as much detail as possible for scrutiny. That will start with the commitment that I have made to provide details on illustrative appeals.
Sarah Boyack also asked about the small business bonus scheme, because the Barclay review called for a review of the effectiveness of the scheme. It called for that review to commence on 1 April 2020. We are ahead of the game here: the contract for the independent review was awarded to the Fraser of Allander institute in the summer. The aim of that review is to evaluate the impact of the small business bonus scheme and whether it can be better targeted to support local investment, employment and growth. It is set to report its findings in 2020.
Andy Wightman
I do not want to sound like a stuck record, but the minister represents a constituency that contains tens of thousands of acres of land owned by the aforementioned Sheikh bin Rashid Al-Maktoum—one of the richest men in the world—who is eligible for the small business bonus scheme. Notwithstanding the review, does she agree that it is ridiculous to exempt some of the richest people in the world from paying a modest contribution to Highland Council?
Kate Forbes
Incidentally, every so often he is my temporary constituent and—[Interruption.]
The point is well made and I do not dispute it. That is why we have committed to the review of the small business bonus scheme. The purpose of the scheme is to ensure that small businesses can grow, develop and invest. We want to ensure that the scheme is well targeted. That is why we have contracted an independent organisation to look at its effectiveness. I look forward to receiving the review’s recommendations and implementing those that we think appropriate.
In light of the time, I will move on. There has been some talk of devolution. We have made moves to devolve elements of non-domestic rates to local authorities, including the empty property relief. However, it is worth reflecting on the initial comments that were made to the Local Government and Communities Committee by the Convention of Scottish Local Authorities. COSLA welcomed the commitment that the Scottish Government made during consideration of the last budget bill to develop a fiscal framework. COSLA’s view is that non-domestic rates should be part of a discussion around local fiscal empowerment to help shape a wider, more far-reaching transfer of powers. However, it also accepted that we have started that process, which is good. I look forward to the other recommendations from the Green Party, all of which I will consider.
Liam McArthur mentioned the interaction with regulation and short-term lets. Those are two very different pieces of work and it is important that we do not conflate those issues. That work might help us reach a shared outcome on short-term lets, but the issue of taxation is very different to the issue of regulation.
Joan McAlpine focused on the current non-domestic rates regime and identified that, in Scotland, we have the most generous rates relief package anywhere in the UK, with more than 90 per cent of properties paying a lower poundage than that in the rest of the UK this year. That indicates the value and truthfulness of the comments that I made at the outset. The Government firmly believes that a strong economy with a growing competitive and innovative business community is essential to supporting jobs, income and our quality of life. The bill will help us to get closer to that ambition.
10 October 2019
Financial resolution
A financial resolution is needed for Bills that may have a large impact on the 'public purse'.
MSPs must agree to this for the bill to proceed.
Financial resolution transcript
The Presiding Officer (Ken Macintosh)
The next item of business is consideration of motion S5M-19269, on a financial resolution. I ask Derek Mackay to move the motion.
Motion moved,
That the Parliament, for the purposes of any Act of the Scottish Parliament resulting from the Non-Domestic Rates (Scotland) Bill, agrees to—
(a) any expenditure of a kind referred to in Rule 9.12.3(b) of the Parliament’s Standing Orders arising in consequence of the Act, and
(b) any charge or payment in relation to which Rule 9.12.4 of the Standing Orders applies arising in consequence of the Act.—[Derek Mackay]
10 October 2019
Stage 2 - Changes to detail
MSPs can propose changes to the Bill. The changes are considered and then voted on by the committee.
Changes to the Bill
MSPs can propose changes to a Bill – these are called 'amendments'. The changes are considered then voted on by the lead committee.
The lists of proposed changes are known as a 'marshalled list'. There's a separate list for each week that the committee is looking at proposed changes.
The 'groupings' document groups amendments together based on their subject matter. It shows the order in which the amendments will be debated by the committee and in the Chamber. This is to avoid repetition in the debates.
How is it decided whether the changes go into the Bill?
When MSPs want to make a change to a Bill, they propose an 'amendment'. This sets out the changes they want to make to a specific part of the Bill.
The group of MSPs that is examining the Bill (lead committee) votes on whether it thinks each amendment should be accepted or not.
Depending on the number of amendments, this can be done during one or more meetings.
First meeting on amendments
Documents with the amendments considered at this meeting held on 27 November 2019:
First meeting on amendments transcript
The Convener
Agenda item 2 is consideration of the Non-Domestic Rates (Scotland) Bill at stage 2. I welcome Kate Forbes, the Minister for Public Finance and Digital Economy, who will speak to and move amendments on behalf of the Scottish Government. I also welcome her officials.
Section 1—Overview of Act and interpretation of references to other Acts
Section 1 agreed to.
Before section 2
The Convener
Amendment 1, in the name of Andy Wightman, is grouped with amendments 5 and 84.
Andy Wightman (Lothian) (Green)
This group of three amendments deals with two distinct issues. Prior to 1956, there were owners’ rates and occupiers’ rates. Currently, the liability for rates lies with the occupier. Amendment 1 would transfer that liability to the owner, who is the party that ultimately benefits from the services that are provided by local authorities and the state more widely in protecting and providing the necessary amenities and infrastructure that generate the value for the owner and the prospect of a return by way of rent. Locating the owner is easier than locating the occupier, and a charge could be secured against property for unpaid rates, if necessary. That is amendment 1.
Graham Simpson (Central Scotland) (Con)
You said that tracing the owner is easier than tracing the occupier. How do you work that out?
Andy Wightman
Because the owners are all listed on a public record.
Graham Simpson
That does not mean that they are easier to trace.
Andy Wightman
They are all on a public record. People can inspect the public record to find out who the owner is and, if necessary, take a charge against the property.
Amendments 5 and 84 deal with a different problem. The committee will recall hearing evidence about phoenix companies that occupy non-domestic property. They appear and disappear, preventing challenges for recovery of unpaid rates. We also heard from Brian Murison, who is the revenues manager at Highland Council, about shell companies as occupiers. In his evidence, he argued that, collectively, they owe around £2 million in unpaid rates across Scotland.
Given that the occupier can disappear but the owner cannot, it seems reasonable to make provision to secure the liability from the owner instead in defined circumstances in which there are difficulties in securing the payment of rates from an occupier. On an initial reading of section 16 of the Valuation and Rating (Scotland) Act 1956, it might appear that councils already have the power to chase the owner when they cannot chase the occupier. However, I read that as a saving provision that was applicable only in the immediate aftermath of the abolition of owners rates.
I initially lodged amendment 5 to provide guidance on section 16 of the 1956 act, but I will not seek to move it. Amendment 84 does the job required. It provides that any council that is
“unable to recover rates ... from the occupier”
has the opportunity
“to recover the rates from the owner”,
and the regulations will set out the specific circumstances in which that can happen. As I said, the intention behind the amendment is not to provide a wide power to collect rates from owners, but to provide a power to do so only in those defined circumstances in which it proves impossible to recover them from the occupier. That seems to me to be a proportionate and sensible response to a real problem that was identified by witnesses.
Annabelle Ewing (Cowdenbeath) (SNP)
Was that one of the Barclay proposals? I do not remember us discussing it when those came to the committee.
Andy Wightman
As I recall, the Barclay review did not identify the issue, and when it came up in the committee the first time, members were rather surprised, because it was perhaps the first time that they had heard about it. I do not know why the Barclay review did not consider it, although perhaps that is explained by the fact that it had a very narrow remit.
Amendment 84 is a proportionate and sensible response to a real problem. I ask members to give it serious consideration.
I move amendment 1.
Kenneth Gibson (Cunninghame North) (SNP)
Following on from what Annabelle Ewing said, I do not think that we should support amendment 1, for several reasons. First, I accept that it might be easier to know who the owner is, but in my constituency there have been difficulties in getting owners to repair buildings because they live in places such as the Republic of Ireland and the Isle of Man. Secondly, we are trying to implement the recommendations of the Barclay review, but the proposal was not even considered by Barclay and was not one of the review’s recommendations. To bring in such a monumental change at this stage, given that we have not taken any evidence on the matter, is wholly inappropriate.
Sarah Boyack (Lothian) (Lab)
I am very interested in the anti-avoidance measure that is set out in amendment 84. The issue of how local authorities can chase people who deliberately avoid paying non-domestic rates has been raised with me, and I have lodged amendment 101, which is similar, although it relates to a later section in the bill, which we will discuss later today.
I am keen to support the principle behind the amendments, because it is important that local authorities have the powers to prevent people from evading such taxes. Our discussions during the process of shaping the bill should send a clear message that that is unacceptable. I am interested in hearing the views of Andy Wightman and the minister on the difference between the effectiveness of my amendment 101 and that of Andy Wightman’s amendment 84.
The Convener
The minister will have a chance to speak in a moment.
Sarah Boyack
Yes, but I wanted to flag up the fact that I would like the minister to comment on that.
I am interested in the different approaches. I think that our amendments are trying to do the same thing, but I would like to hear not only from the minister and Andy Wightman, but from any member who has views on the matter.
Alexander Stewart (Mid Scotland and Fife) (Con)
My views on amendment 1 are similar to those that we have heard from other members of the committee. In some circumstances, it is difficult to ensure that the owner of a property has the feu liability. We have numerous examples of situations in which buildings have fallen into disrepair and, because the owner is outwith the country, it takes years for the community to manage that blot on the landscape. I have some difficulty with amendment 1 in that regard.
Graham Simpson
Last night, we received a late submission from the Scottish Property Federation. I was struck by its point that the proposal would be a fundamental change in the business relationship between owners of properties and people who lease them. If someone signs a lease, that can—and usually does—make them liable to pay non-domestic rates and water rates. The SPF said that there had been just over 4,000 new lease transactions in Scotland in the past year, which would suggest that the change could have an impact on tens of thousands of leases.
Andy Wightman
Will the member take an intervention?
Graham Simpson
I have almost finished making my point.
It would be a fundamental change and one that might have unintended consequences.
The Minister for Public Finance and Digital Economy (Kate Forbes)
I will speak about the point that it would be a fundamental change before moving on to the substance of the amendments.
Members are right to say that the proposed reform, which was not considered by Barclay, would mark a substantial move away from the system that has been in place since 1956. The consequences of such a move have not been assessed or scrutinised by Parliament. There are several big questions, such as whether, in some cases, making owners liable could increase rates avoidance and whether councils would find it easy to recover rates on properties that are in foreign ownership. Those questions would need to be answered before we make such a substantial move away from the rates system as we know it.
Regarding the substance of the amendments, on amendment 1, there is certainly merit in the notion that councils might benefit from additional tools to tackle rates avoidance.
Andy Wightman
Will the minister take an intervention?
Kate Forbes
Yes.
Andy Wightman
There has been a lack of clarity from members on which amendment they are talking about. Minister, you just mentioned amendment 1 in relation to avoidance. I think that you mean amendment 84.
Kate Forbes
I mean your first amendment.
Andy Wightman
Amendment 1.
Kate Forbes
Your first amendment is about transferring the rates liability on a property to the owner rather than the occupier. One of the benefits that you identified when you spoke to that amendment was that it would enable councils to benefit from additional tools to tackle rates avoidance.
Andy Wightman
It is amendment 5 that is designed to provide the tools to tackle not so much avoidance but the situation that was highlighted to the committee by two separate witnesses, whereby millions of pounds in rates are not being collected because companies are formed and wound up over and over again. Therefore, amendment 84 is about providing the opportunity, in limited circumstances, to get the rates payment from the owner.
Amendment 1 is fundamentally different in that it would completely change the whole non-domestic rates system. It is important that we understand the distinction.
Kate Forbes
I appreciate that clarity, which is helpful. As you said, amendment 1 would substantially change the rates system. It has been identified that one of the merits of doing that is that it would enable rates avoidance to be tackled. I was merely making that connection.
I cannot support amendment 1. Such a substantial change would need to be scrutinised before we could go down that route.
I will not speak to amendment 5 unless the member wants me to, because he does not intend to move it.
Amendment 84 would allow councils to recover rates from the owner of a property when they are unable to do so from the occupier. It is unclear to me from the drafting of the amendment whether the council would have full discretion to exercise that power, or whether the circumstances in which a council may recover rates from an owner should be dealt with in the regulations that amendment 84 would allow the Scottish ministers to make.
As I mentioned, we are firm believers in tackling avoidance, which is why part 4 of the bill provides the Scottish ministers with the power to propose regulations to prevent or minimise advantages that arise from
“non-domestic rates avoidance arrangements”
that are “artificial”. As the bill requires us to consult assessors and local authority representatives on those regulations, the people who administer the system will have greater input than would be the case under an amendment to the bill.
In response to Sarah Boyack’s question, I point out that amendment 101 is narrower than amendment 84, in that it talks only about the recovery of rates that could take place when arrangements are subsequently made unlawful by our general anti-avoidance regulations.
The Convener
Normally, we do not speak to amendments that we have not yet reached, but I thank the minister for providing clarity on that point.
I ask Andy Wightman to wind up on amendment 1.
Andy Wightman
I want to put something on the record, because some members did not say which amendment they were talking about. I accept that amendment 1 would involve a fundamental change to the rating system, and I do not think that there is support among committee members for that.
I do not accept Mr Gibson’s argument that the issue was not in the Barclay review. The whole point is that this is a non-domestic rates bill. It is the only one that we have had in 20 years, and it is probably the only one that we will get for another 20 years. The Barclay review was defined in extremely narrow terms; it asked one question of consultees. The bill gives Parliament the opportunity to amend the non-domestic rating regime more generally, if it so chooses.
As I said, I will not seek to move amendment 4.
Members: Amendment 5.
Andy Wightman
Amendment 5—I apologise.
However, I might come back to that in the light of whatever happens with amendment 84, because although the minister correctly said that part 4 of the bill deals with anti-avoidance, it is about avoiding artificial arrangements. That is good—there is no problem with that.
Amendment 84 deals with a very specific problem, which was highlighted to the committee in evidence by two separate witnesses, one of whom was a professional valuer; the other was the head of revenues at a local authority. They made it very clear that there are circumstances in which occupiers are so-called phoenix companies or, as in the case of Highland Council’s evidence, so-called shell companies—typically, Scottish limited partnerships, where the director is ultimately found to be an elderly gentleman in Edinburgh who did not even know that he was a director—and councils cannot recover those rates. In those defined circumstances, amendment 84 would give councils the power to seek recovery from the owner.
08:45To answer the minister’s question regarding regulations, there might be some drafting adjustments to be done, but my intention is that the circumstances in which councils would have the power, and the way in which the power could be exercised, would be set out in regulations. Amendment 84 would make it clear that councils have that power.
I lodged amendment 84 because, although I read section 16 of the 1956 act as a saving provision, the advice that I took suggested that it could be read as a continuing power that councils still have to recover rates from owners. If that is the case, the power is not well defined. Therefore, for the avoidance of all doubt, I do not want to rely on what drafters might have thought and intended in 1956, so I am seeking to insert a new section—
Kate Forbes
I confirm that I agree with the sentiment of amendment 84, which might not be a great consolation, but the point that I was trying to make was that I would far rather go down the consultative route, which would involve assessors and local authority representatives having an input, in considering whether to provide councils with additional powers. I recognise that Andy Wightman wants to achieve that through a formal amendment. I certainly agree with the thrust of his proposal; I just do not think that an amendment is the right way to go about it. I would rather go down the consultative route.
Andy Wightman
I thank the minister for that comment. She mentioned “the consultative route”, but the bill is probably the only legislative opportunity that we will have for another 20 years. I am very happy for there to be consultation on the matter, and that would not be difficult to organise between now and stage 3. I am certainly happy to consider amendments to amendment 84 that would subject the regulations to consultation. I do not see any conflict between the intention of the amendment and the need for consultation, in so far as the regulations that would give effect to the proposal, setting the commencement date and so on, can and—I agree—should be subject to consultation. I would be happy to consider that at stage 3; I agree with that point.
However, if we do not get a provision into the bill at this stage, we will never have the opportunity to address an issue on which we received clear evidence. I would not necessarily describe the issue as being one of avoidance, although, in the case of shell companies, it is avoidance, as they are intentionally winding themselves up and disappearing as legal entities. They obviously have no further liability for rates, because there is no legal person around. That is a clear problem that has been identified by councils, and we, as the Parliament, have a duty to do as much as we can to provide a remedy in the limited circumstances in which the problem arises.
The Convener
The question is, that amendment 1 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Wightman, Andy (Lothian) (Green)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 1, Against 6, Abstentions 0.
Amendment 1 disagreed to.
Amendment 5 not moved.
Amendment 84 moved—[Andy Wightman].
The Convener
The question is, that amendment 84 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Wightman, Andy (Lothian) (Green)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 2, Against 5, Abstentions 0.
Amendment 84 disagreed to.
Section 2 agreed to.
After section 2
The Convener
Amendment 6, in the name of Andy Wightman, is in a group on its own.
Andy Wightman
As the committee is aware, recommendation 28 of the Barclay review was:
“All property should be entered on the valuation roll (except public infrastructure such as roads, bridges, sewers”
and so on. A key argument for bringing things on to the roll is that, at the moment, with certain subjects being exempted, there is no information at all about the value associated with the properties—and, therefore, about the revenue forgone and the costs incurred by such exemptions.
For example, a £1 million a year agricultural operation on the edge of a small town is completely exempt from contributing to local authority revenue, while the schools, the pubs, the shops and cafes in the local town are all on the roll and all valued. So the first argument for this—in fact it was a key recommendation of Barclay—is that bringing all properties on to the roll improves transparency. This should not be onerous. More than 10,000 new entries have been made in the past two years in the wake of the Land Reform (Scotland) Act 2016.
The Convener
Are you speaking to amendment 6?
Andy Wightman
Sorry, convener—no, I am not speaking to amendment 6. I apologise. May I start again?
The Convener
Yes.
Andy Wightman
Amendment 6 would alter the basis of valuation of property. In the current non-domestic rates system the whole property is assessed for its rental value, which is a combination of the site and improvements to the site. This amendment provides that the valuation be split, as is done in Denmark, for example, so as to provide two values to the ratepayer. One values the unimproved site and the other provides the value of the improvements, typically buildings. This would enable authorities—if, of course, they are given back the power to set the rate—to weigh the two valuations so as to weigh the rate more on the site value than on the improvements, for example. That would avoid the current situation, which disincentivises improvements.
Of course, a weighting of 100 per cent on a site would, in effect, deliver land value taxation. A weighting the other way, of course, would be perfectly legitimate as well. So this is a reform to the way in which valuations are done and reported to ratepayers: it would make no change, in and of itself, to the rates that are set or the way that they are set. I believe that this reform would provide greater flexibility in the way that rates are applied and would be easily implemented by copying the process that is already in place in countries such as Denmark. I apologise for setting off by talking about the wrong group of amendments.
I move amendment 6.
Kate Forbes
Thank you for those opening comments. I shall start with the practical implications and then comment briefly on land value tax. I do not want to sound like a broken record, but my point about the practical implications is similar to what I said on amendment 1: it would be a fundamental change and it is unclear to me what replacing the “net annual value” of properties, which in turn is used as the basis for the rateable value, with their “value” would achieve, short of leading to an immediate and fundamental change in the tax base and the way that assessors ascribe a value to properties. I fear that this would leave assessors in the very difficult position of having to determine, without the precedent of case law, what is an appropriate way to carry out evaluations.
On land value tax, the Barclay review concluded that more work should be done to assess land values so that the debate over land value tax could be better informed, but until that information exists, any move to a land value tax that has not been properly assessed, consulted on and scrutinised by Parliament would constitute a complete and total overhaul of non-domestic rates.
Finally, my fear is that the amendment would make parts of section 6 of the Valuation and Rating (Scotland) Act 1956 unworkable, as well as a large number of other acts and secondary instruments that would have to be amended to refer to “value” rather than “net annual value” or “rateable value”. In light of that, I am unable to support the amendment.
Andy Wightman
I would not say that this would be a fundamental change. Valuers undertake their valuations independently and it is not for us to tell them how to go about their business. They derive their own practice notes, they are members of international associations of valuers and they are routinely exposed to best practice globally. This is not about implementing a land value tax—there is nothing in the amendment that would require that—it is simply about providing a more nuanced valuation of sites. Of course, it would enable the implementation of a land value tax, but it does not obligate it. I shall leave it there and press the amendment.
The Convener
The question is, that amendment 6 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Wightman, Andy (Lothian) (Green)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 1, Against 6, Abstentions 0.
Amendment 6 disagreed to.
Section 3—New or improved properties: mark in valuation roll
The Convener
Amendment 16, in the name of the minister, is grouped with amendments 17 and 18.
Kate Forbes
Amendments 16 to 18 are relatively technical in nature. They relate to the mark that assessors have to include in entries in the valuation roll that relate to new builds and improved properties. The mark assists councils in determining eligibility for business growth accelerator relief. The amendments exclude from the definition of “newly built” properties those properties that are being added to the roll because they were previously exempt from being on it but are not newly built. Examples include agricultural lands and heritages and rural ATM sites. If properties of those types undergo a change in use, it may make them liable for entry in the roll. The amendments in the group will ensure that only properties that are newly in existence will warrant a mark in the roll.
Amendment 18 will ensure that the assessor will remove the mark from an entry in the valuation roll when there is a change to the entry, for example at revaluation. The purpose of the mark is to allow the local authority to identify which changes made by the assessor potentially qualify for business growth accelerator relief. Once made, the purpose has been served, as the local authority will administer the relief for as long as the person is entitled to it, so there is no need for the mark to remain in the roll.
I move amendment 16.
The Convener
As no one has any comments, do you wish to wind up, minister?
Kate Forbes
I have nothing further to say on the amendments in the group.
Amendment 16 agreed to.
Amendments 17 and 18 moved—[Kate Forbes]—and agreed to.
Section 3, as amended, agreed to.
After section 3
The Convener
Amendment 7, in the name of Andy Wightman, is grouped with amendment 8. I call Andy Wightman to move amendment 7 and speak to both amendments in the group—again. [Laughter.]
Andy Wightman
I apologise for that, convener. As I was saying, recommendation 28 of the Barclay review was that
“All property should be entered on the valuation roll ... except public infrastructure”.
A key argument for that is that the current way in which we provide for exemptions in primary legislation means not only that no liability arises for exempt properties but that there is no information on the value that is associated with those properties. The cost of such exemptions is incurred by other ratepayers. In the remarks that I made previously, I gave the example of a £1 million a year agricultural operation that is exempt even though it relies on the same services that the local schools, pubs, shops and cafes rely on, and they are valued and on the roll. Whether they pay rates is a separate question, given the systems of relief and so on.
Bringing all properties on to the roll would improve transparency and, as I said, it would not be onerous. Over 10,000 properties were entered in the two years following the passing of the Land Reform (Scotland) Act 2016, which brought shootings and deer forests back on to the roll, those having been removed in 1994.
Kenneth Gibson
Andy Wightman said that it would not be onerous, but that is not the evidence that we heard from the assessors, who told us that they are already under severe pressure and that they have difficulty in recruiting new assessors. What would be the cost of the exercise and what would be the purpose in financial terms, given that ministers have made it clear that they would provide 100 per cent exemption for such buildings in any case?
Andy Wightman
I have not made an assessment of the costs, but I am putting the evidence of what has happened in the past two years, when over 10,000 properties have been entered on to the roll. If such properties are deemed to be worthy of having no liability for rates, that is better put into practice by the granting of relief. It then becomes a conscious decision that has to be justified and is open to scrutiny.
Amendment 7 would bring on to the roll almost all properties that are currently exempt. The exception would be those that are covered in subsection (3) of the proposed new section, which cannot be included for various reasons.
Annabelle Ewing
On that point, I note that fish farms would be brought on to the roll. Salmon companies pay rates on land, properties, processing plants and so forth. My understanding is that the offshore cages and so on are leased from the Crown Estate. That is the current arrangement. What reflection have you made on the benefits or disadvantages of what you propose with regard to the Crown Estate and of changing that arrangement and potentially bringing those things into the rates system without—it would appear—any consultation with relevant stakeholders? That would be a double whammy. Is that what you intend to do?
09:00Andy Wightman
I do not really understand the point of your intervention. They are tenants of the Crown in the same way that all—
Annabelle Ewing
Excuse me, could I perhaps—
The Convener
No, it was an intervention. This is not a debate.
Annabelle Ewing
I know, but the member said that he did not understand.
The Convener
Andy Wightman started to answer. If he lets you intervene again, please make it short. Andy, on you go.
Andy Wightman
Thanks, convener.
Obviously, the fish farms are tenants of the Crown and, just like tenants in offices up in Tollcross, they pay rates. That is what occupiers do. The fact that the landlord is the Crown is neither here nor there—the landlord could be anybody.
Annabelle Ewing
Will Andy Wightman take an intervention on that point?
Andy Wightman
Okay.
The Convener
Annabelle, you will get a chance to come in after he has finished.
Annabelle Ewing
The member indicated that he would take a brief intervention.
In Andy Wightman’s scenario, the offshore salmon farms would pay rent to the Crown Estate, which is the current arrangement, plus they would pay rates. Is that what he is advocating?
Andy Wightman
All tenants of non-domestic property pay rent to the landlord—that is an obvious statement—and they are liable for non-domestic rates. I do not understand what the issue is. Just because someone pays rent does not mean to say that they do not pay rates. I have dealt with amendment 7, so I will move on.
Amendment 8 is an alternative way of moving towards the same objective, though we may never get there. One of the problems with exemptions, as opposed to reliefs, is that they are set out in primary legislation and, therefore, they can be removed only by subsequent primary legislation; that is what amendment 7 seeks to do, but I do not anticipate support for it. Having exemptions in primary legislation that require further primary legislation to amend them is, in many ways, a clumsy way of proceeding. If amendment 7 is not agreed to—I do not expect it to be—we will lose the opportunity to review those exemptions for perhaps another 20 years, or whenever we get another non-domestic rates bill.
Amendment 8 would allow exemptions that are currently set out in primary legislation, of which there are quite a lot, to be removed by secondary legislation. Some exemptions are set out in primary legislation and some are in secondary legislation; those that are set out in secondary legislation can of course be easily removed or amended, but those in primary legislation require further primary legislation to remove or amend them. Amendment 8 would provide a power to the Scottish ministers to make regulations that would remove any exempt subjects that are currently exempt by means of primary legislation. Amendment 8 would not, in itself, remove the exemptions, but it would allow for that possibility in the coming years.
I move amendment 7.
Graham Simpson
Will Andy Wightman take an intervention?
Andy Wightman
I have just finished.
The Convener
If you have just finished, that is great. Let me clarify that interventions should be short and to the point. If members catch my eye, they can get in and make their contribution, if it is relevant.
Graham Simpson, do you want to come in?
Graham Simpson
I was going to ask Mr Wightman a question, but I will just make my point. Amendment 8 is better than amendment 7, as it would potentially tackle the serious issue of consultation that was raised by Ms Ewing. It would allow ministers to at least consult on such issues, whereas amendment 7 is all-encompassing.
Sarah Boyack
I have a similar point. I totally understand where Andy Wightman is coming from with amendments 7 and 8, given that it was one of the recommendations of the Barclay review, and I get the fact—raised by Kenneth Gibson—that there is an issue of priorities and timing.
However, equally, this is our chance to amend non-domestic rates, and I am tempted by amendment 8 as a way to do that by giving the Scottish Government the capacity to do it at a later point. It does not need to be done by Christmas. Representations could be made and consultation could be done. The principle is good.
I raise the matter of clarifying the issue of ATMs. We see their removal right across the country, with the result that people are losing access to cash machines. There is also the issue of free cash machines. I would not want to do anything that inadvertently hastened the decline and removal of ATMs, but my understanding of amendment 8 is that we would be able to craft what is exempted and things would not automatically move on to paying rates. However, the amendment would enable the system to be transparent in a way that it currently is not.
For those reasons, I am keen to support amendment 8. It is not a bad thing that the committee has two choices, but amendment 8 is better because it allows the Government to do a proper consultation while, equally, we will get progress and the issue will not be parked for a decade or two.
Kate Forbes
I will speak to amendment 7 first. I agree that there is merit in having better information on the properties that Andy Wightman identified, which are currently excluded from the valuation roll. However, in line with Barclay, I do not believe that the administrative and associated financial burden on assessors and businesses would be worth while when we have no intention of levying rates on those subjects. Barclay proposed that, in the interests of transparency, rather than exempting properties from the roll they should be entered into it with 100 per cent relief but, because of state aid restraints, that is not feasible for some properties, particularly in agriculture and fisheries.
As such, removing the exemption would have significant cost implications for the agricultural sector, it could easily cause the further deployment of offshore wind to cease and it could present unnecessary risks to rural communities—for example, those that rely heavily on local bank cash machines. I do not think that those inevitable consequences are a price worth paying for the amendment, particularly for the agricultural sector, which is already facing huge uncertainties as a result of Brexit. Therefore, I encourage the committee not to vote for amendment 7.
There is no reason to resist or reject amendment 8, but we do not see a need for it because ministers already have the power to set exemptions by order. I do not think that the amendment adds anything new.
Andy Wightman
My understanding is that ministers cannot remove an existing exemption from primary legislation. That is the point of amendment 8. You appear to be arguing that you already have that power. That is not my understanding, but I stand to be corrected.
Kate Forbes
As I say, I am fairly equivocal on the amendment. I do not see a need for it because exempted classes can already be set by order, but it is right to say that we cannot exclude existing ones, which is what I think Andy Wightman’s question was. If members wish to support amendment 8, we have no concerns about that.
Andy Wightman
That was helpful. To clarify amendment 8, my understanding is that ministers have the power to make new exemptions under secondary legislation if they wish, but they do not have the power to remove existing exemptions that are set out in primary legislation. The amendment provides the power to remove existing exemptions by regulation.
I press amendment 7.
The Convener
The question is, that amendment 7 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Wightman, Andy (Lothian) (Green)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 1, Against 6, Abstentions 0.
Amendment 7 disagreed to.
Amendment 8 moved—[Andy Wightman]—and agreed to.
Section 4—Entering of parks in valuation roll
The Convener
Amendment 19, in the name of the minister, is grouped with amendment 20.
Kate Forbes
Amendments 19 and 20 address the committee’s request in its stage 1 report that the Scottish Government
“elucidate its policy more fully”
on section 4, with the aim of making the rules on the entering of parks in the valuation roll more straightforward and easier to understand.
Amendment 20 is quite technical and I will endeavour to explain it. Proposed new subsections (1ZA) and (1ZD) of section 19 of the Local Government (Financial Provisions) (Scotland) Act 1963 seek to ensure that, where a part of a park is to be entered on the roll, a separate entry should be made for that part and the remainder should remain exempt. In other words, it is not the Government’s intention that the presence of, for example, a cafe in a public park should lead to the entry of the whole park in the roll. That is consistent with the Barclay review’s recommendation that parks should remain exempt from being rateable.
Secondly, proposed new subsections (1ZB) and (1ZC) of section 19 of the 1963 act set out the conditions under which a park, or a part of a park, becomes rateable. The first reason, which is set out in subsection (1ZB), is that the park is occupied by someone other than the council or other public body that controls the park. The second reason, which is set out in subsection (1ZC), is that the park, or part of the park, is occupied by the council or other public body that controls the park and—critically—that payment may be required
“for access to facilities ... or for goods or services provided on it.”
Taken together, those two subsections will ensure that all commercial activity in parks will be rateable, as was recommended by the Barclay review.
Another key objective of the Barclay review was to level the playing field. Subsections (1ZB) and (1ZC) will ensure equality of treatment across all activities, both commercial and charitable, and both inside and outside parks. All non-exempt properties, including those that are used for charitable purposes outside parks, are currently rateable, so it is only fair that comparable properties inside parks should be rateable as well. Registered charities and community amateur sports clubs that fall to be entered on the roll as a result of section 4 will be eligible for 80 per cent mandatory relief, with a 20 per cent discretionary top-up by the council, as is normal. Further, 100 per cent discretionary relief is available for non-profit recreational activity. Certain properties that will be added to the roll as a result of section 4 of the bill are likely to be eligible for that relief.
I hope that that helps to explain what the Government is endeavouring to do with this significant redraft of section 4.
I move amendment 19.
Amendment 19 agreed to.
Amendment 20 moved—[Kate Forbes]—and agreed to.
Section 4, as amended, agreed to.
After section 4
The Convener
Amendment 85, in the name of Sarah Boyack, is in a group on its own.
Sarah Boyack
Amendment 85 concerns an important issue in my local area, which I would like to address in this debate on non-domestic rates.
In the past few years, we have seen a significant expansion in the availability of private student residences. Historically, universities and colleges provided their own in-house accommodation, but recently there has been a big shift towards private providers. Such accommodation is very expensive, but students often have no choice but to take it because of the shortage of housing in Edinburgh. Access to accommodation is particularly challenging for students from overseas, who often do not know the area until they have settled into their courses.
Students are rightly exempt from paying council tax. That policy should be defended, and I have no intention of seeking to change it. However, I question why companies are able to make profit from renting out student accommodation when they should be expected to make a contribution to our councils for the local services that are provided. In addition, companies should make that contribution without passing it on to the students to whom they rent.
I especially want to raise the issue of the use of private student accommodation that is let out in the summer for tourists’ use. Again, the companies that rent out such properties are making profits but are not making any contribution to the cost of providing local services. As it is drafted, amendment 85 would leave to the Scottish Government the details of how such entries in the roll would be implemented, and I believe that consultation on those would be necessary. However, I feel that we should debate the issue as we discuss the extent to which non-domestic rates are levied and who should be required to pay. I will be interested to hear members’ thoughts on the amendment.
I move amendment 85.
09:15Graham Simpson
Sarah Boyack raises an interesting issue. A number of such developments are cropping up in Edinburgh, Glasgow and other cities. The residences are privately run—not that that matters—and for most of the year they are rented out to students. When the students are not there, they are let out to tourists, so they become bona fide businesses that are competing with other businesses in the self-catering sector. The idea that they should not pay non-domestic rates for the part of the year when they are businesses seems to be wrong. There could be unintended consequences, in that those businesses could hit students for their increased bills—that is a danger. However, I think that it is worth supporting amendment 85 at this stage, although it may need some further work. I am prepared to support it at this point, and we can see where we go from there.
Kate Forbes
I welcome Sarah Boyack’s explanation of the policy intent behind her amendment, and I certainly sympathise with what she is trying to do. I will run through a few of my thoughts. The Barclay review recommended that charity relief be reformed with regard to student accommodation, although it did not distinguish between accommodation that is let by institutions and accommodation that is provided by the private sector. At the time of the review, the Scottish Government rejected that recommendation, in part because of issues with the practicability of distinguishing commercial from non-commercial use. Amendment 85 does not seek to distinguish between those two types of use—instead, it seeks to make private sector and other landlords liable to be rated while providing an exemption for the institutional providers.
My concern relates to the analysis of any unintended consequences for students in particular. I am concerned about the potential impact on students, who may find that their accommodation choices are reduced or become less affordable, as landlords may have little option but to pass on their costs to students in the form of higher rents. I am therefore unable to support amendment 85 without having undertaken a little more analysis, and perhaps some consultation, on what the consequences would be. I would be happy to have a conversation in advance of stage 3 to see whether further analysis could be done at that point on the effects of the amendment. At present, however, there has been too little analysis of the potential unintended consequences to enable me to support it.
Sarah Boyack
I appreciate, and very much welcome, the minister’s comments. I would be the last person who would want to deliver the unintended consequences to which Graham Simpson and the minister referred. As the issue was raised earlier, it would be an omission not to discuss it.
I would be interested in amending my amendment at stage 3, and crafting it in a way that takes into consideration the summer issue in particular. I would be happy to come back and have a look at it during the next few months. A question that arises is what the process would be in terms of the Government bringing forward regulations and the detail that follows. As I understand it, there are issues to do with how it relates to the system for houses in multiple occupation, through which money is paid. I want to distinguish between the private sector and accommodation that is owned by universities or colleges. I think that there is merit in us taking the issue further, to stage 3.
The Convener
Do you want to press or withdraw the amendment?
Sarah Boyack
I would like to press it at this stage.
Amendment 85 agreed to.
Section 5 agreed to.
After section 5
The Convener
Amendment 21, in the name of the minister, is grouped with amendments 22, 24 to 30 and 32 to 37.
Kate Forbes
The amendments all relate to reforming the appeal system. I will first speak to the amendments that I have lodged and then turn to amendment 36, in the name of Alexander Stewart.
The amendments have been informed by the final report of the Barclay implementation advisory group appeals sub-group, which was published on 10 October, and they are quite technical.
Amendment 21 requires, at revaluation for a given property, the assessor to enter in the valuation roll information, including the valuation, that has been agreed in writing between them and the proprietor, the tenant or the occupier beforehand, whether or not the agreement was reached before or after publication of the draft roll. The only exception is if,
“since the agreement was reached, there has been ... a material change of circumstances.”
Amendment 22 introduces a requirement for assessors to publish a draft valuation roll before they make up the final roll. It is intended that Scottish ministers will specify a date for publication of the draft roll. The amendment also requires that assessors send to the proprietor, tenant or occupier of the property a draft valuation notice that contains the details that are listed in the draft roll. The amendment also allows ministers to specify by regulations under the negative procedure any other information that is to be included in the notice.
Amendment 22 also provides that
“A person who receives a draft valuation notice can make representations to the assessor”
about the content of the notice. However, the assessor is not bound by the contents of the draft roll or draft notice when making up the final roll, as there may be a need to amend the draft roll before it comes into force—for example, if new information that would affect the valuation has become available. That provision links with other amendments in my name to allow the proprietor, tenant or occupier to make representations once the draft roll is published about what the entry in the roll should be.
Amendment 24 seeks to ensure that a person may not lodge a proposal to alter an entry in the valuation roll following revaluation if there has been a prior
“agreement in writing between that person and the assessor ”.
The amendment is based on a recommendation of the appeals sub-group that pre-agreements should be binding on a person in that situation, so that a proposal cannot be lodged by a person against a pre-agreed value.
Amendments 25 to 27 allow the assessor to adjust the valuation roll entry for a property when a proposal has been lodged, either in accordance with the proposal or in the manner that the assessor sees fit. That does not require the agreement of the proposer, as the assessor’s role is to provide an accurate valuation with the information that is available at the time that the entry is finalised. There may be information that suggests that the alternative value that is requested in the proposal is incorrect. If the person’s proposal is not accepted, amendment 32 provides that the person can appeal.
Amendment 28 allows Scottish ministers, by regulations, to set fees in relation to the lodging of proposals, as recommended by the Local Government and Communities Committee in its stage 1 report. Amendment 28 is a direct response to the committee’s report. Amendment 29 provides that those regulations will follow the affirmative procedure.
Amendments 30, 32 and 33 will ensure that, when a person has lodged a proposal, only that person may appeal to the valuation appeal committee, for example to prevent the situation in which the assessor discusses and agrees a proposal with a tenant and the owner seeks to appeal. If the owner wishes to be involved, they would have to get involved at the proposal stage.
Amendments 34 and 35 aim to ensure than an appeal can only
“be made on the same basis as the proposal”,
to prevent an appeal from being made on a completely new basis that the assessor has not considered.
Amendment 37 will mean that complaints to the valuation appeal committee under the Lands Valuation (Scotland) Act 1854 can be lodged only by a person who is not the proprietor, the tenant or the occupier of the property.
As members will know, complaints are a means—separate from appeals—by which to have an entry in the roll reviewed or to raise the absence of an entry. The ability of third parties to continue to raise complaints is unaffected by the amendment. The purpose of the amendment is to avoid the risk that proprietors, tenants and occupiers may attempt to circumvent the new proposal stage that is being introduced, and any fees that are attached to it, by complaining to the valuation appeal committee about their own property’s value, rather than going through the normal route of lodging a proposal.
Andy Wightman
I am listening carefully to what you are saying, minister. In relation to amendments 32 and 33, you said that, if an occupier or tenant lodges a proposal, the proprietor cannot appeal. In those circumstances, how would the proprietor know that the tenant had lodged a proposal? At the moment, they can appeal. If the Government removes the right to appeal, what would happen?
Kate Forbes
An owner can get involved at the proposal stage and they will know that an evaluation is due. We are moving to a new two-stage system, where someone can propose and appeal, which, incidentally, formalises what already takes place informally. The hope is that the system does not create something new, but that it formalises the current system.
The current situation of owners choosing not to get involved may present challenges in the future. However, I would hope that an owner would be interested in the business rates that their property is liable for and the valuation of that property. It is really a question of whether the owner chooses to get involved with the process at all.
The amendments merely try to avoid additional delays and bureaucracy so that where an assessor has agreed a proposal with the person—a tenant or an occupier—the owner cannot then say further down the line that they fundamentally disagree with that proposal and appeal in that way. The parties that are involved in the proposal are the same parties that have to be involved in the appeal. A new individual cannot be introduced at that stage. If we do not make that clear, it would completely undermine the proposal stage because someone could always be sure of overturning a proposal at appeal. Does that help?
Andy Wightman
My point was that the opportunities for the proprietor to be involved are being restricted. Is there not an argument that the proprietor should be made aware that a proposal is being made? If they are not aware of that, they lose their one opportunity to have discussions on the matter. I will let you take that question away. It is just a concern that I have.
Kate Forbes
I will take that away for consideration. We can think about how we notify owners that a proposal has been lodged. It is a fair comment.
Mr Stewart’s amendment 36 would place a requirement on Scottish ministers to consult local authorities, assessors, business sector representatives and such other persons as we consider appropriate before making regulations to set fees in connection with appeals. We have taken a consultative approach throughout the bill process and will continue to do so.
I would be happy to support Mr Stewart’s amendment, but if he wishes to bring it back at stage 3, I would be keen to work with him to adjust certain elements. I would expect the Government to consult representatives of assessors and the business sector, but I am not convinced that that needs to be done with individual local authority assessors.
If Mr Stewart chooses to move amendment 36, we will support it, but if there is anything that we can do to fine-tune it for stage 3, I would be keen to work with him on that.
I move amendment 21.
Alexander Stewart
I thank the minister for her positive comments on amendment 36. I will move the amendment because, as the minister has outlined, it will ensure that there is an opportunity to gather evidence on the impact of the policy change for individuals and organisations. That is important. I would be more than happy if the amendment were agreed to at this stage. I would also be happy to have some discussion with the minister before stage 3. If there are things that we can fine-tune, doing so would be advantageous for the bill and the sector. It is all about ensuring that we have that constructive co-operation and consultation to ensure that we provide organisations, individuals and the business sector with the best approach.
09:30Andy Wightman
I agree with the comments that have been made by the minister and Mr Stewart, but I note that subsection (c) in amendment 36 says that, among those who are to be consulted are
“representatives of the business sector”.
I remind members that these are not business rates; they are non-domestic rates. I am a board member of the statutory corporation that owns the building in which we are sitting, which pays £7 million in rates. The words in subsection (c) should really be “representatives of ratepayers”, because occupiers that are businesses make up less than two thirds of all ratepayers.
The Convener
I am sure that that is something that we can clarify and amend at stage 3, if necessary. Minister, would you like to wind up?
Kate Forbes
I appreciate Alexander Stewart’s commitment to work with me to adjust amendment 36 slightly.
Amendment 21 agreed to.
Amendment 22 moved—[Kate Forbes]—and agreed to.
Section 6, as amended, agreed to.
Section 7—Proposals to alter, and appeals against, valuation roll
The Convener
Amendment 23, in the name of the minister, is grouped with amendments 31 and 52.
Kate Forbes
These three amendments are, like others, extremely technical in nature.
It might be helpful if I explained that, as some members might know already, some subjects are valued by what are called designated assessors. There are five such assessors in Scotland who, in addition to their day job as an assessor, have responsibility for valuing certain subjects that could broadly be described as the former public utilities. For example, the Fife assessor is currently the designated assessor for water subjects in Scotland. Once a valuation has been determined for all water subjects in Scotland, that information is entered on the Fife assessor’s valuation roll. In short, unlike the assessor regime, the designated assessor regime takes a subject-based approach rather than a geography-based approach.
The three amendments in this group refine the drafting to provide that a new proprietor, tenant or occupier can make a proposal to the assessor or the designated assessor, as appropriate; that appeals against a valuation determined by either an assessor or a designated assessor can be lodged with a valuation appeal committee, and it will always be a committee for the area where the lands and the heritages are entered in the valuation roll; and that an assessor information notice can be issued, as appropriate, by an assessor or a designated assessor. That, in short, is what the amendments relate to.
I move amendment 23.
Amendment 23 agreed to.
Amendments 24 to 26 moved—[Kate Forbes]—and agreed to.
Amendment 27 moved—[Kate Forbes].
The Convener
The question is, that amendment 27 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division—I ask Kenneth Gibson to please put away his Etch A Sketch.
For
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Wightman, Andy (Lothian) (Green)
Against
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 5, Against 2, Abstentions 0.
Amendment 27 agreed to.
Amendment 28 moved—[Kate Forbes]—and agreed to.
The Convener
Amendment 86, in the name of Sarah Boyack, is grouped with amendments 87, 97, 65, 98, 99, 68, 100, 71 and 72.
Sarah Boyack
The Delegated Powers and Law Reform Committee picked up the question of whether ministers currently have too much power. My amendments in the group propose to limit the powers of ministers by removing their ability to make extra regulations. I have attempted, with support from the drafters, to try to deliver on that aim. Specifically, my amendments seek to limit the extent of the powers that can be exercised by the Scottish ministers.
I am conscious that the Scottish Government has lodged amendments on the matter. Without making too many predictions, I guess that the minister will say that the Government’s amendments are better drafted. I am keen to have a discussion about the differences between the two sets of amendments. My amendments have been drafted so as to remove the power to make provision for “such other matters”, which appears in sections 17 to 21. The amendments together provide an appropriate constraint on ministers’ powers. They are relatively straightforward. I will say no more, at this point.
I move amendment 86.
Kate Forbes
I thank Sarah Boyack for speaking to her amendments and outlining her reasons for wishing to restrict use of ancillary powers. I think that we are all agreed on the issue; as Sarah Boyack said, the Scottish Government has submitted its own amendments in response to the legitimate concerns that the DPLR Committee raised. I thank that committee for its thorough scrutiny of the delegated powers in the bill.
I think that we are all agreed that the bill will amend what is a very complex rating system. That creates a risk that a change to one part of the system might have unintended consequences in another part. The bill will introduce a considerable number of new elements into the rating system—one example is the introduction of a civil penalty regime. Ancillary provisions might therefore be needed as those new elements are created, or as experience is gained and those elements are further developed.
We considered that it was prudent to allow some flexibility in how the ancillary powers in the bill are used, while being mindful of the narrow context within which each of the powers must operate. Such flexibility will enable unforeseen issues to be dealt with without the need to return with primary legislation as a result of the powers being too rigid. Of course, all uses of powers are, quite properly, subject to parliamentary oversight, which allows Parliament the opportunity to stop any use that it feels is inappropriate.
Amendments 86 and 87 relate to section 7(4) of the bill, which will insert new provisions in the Local Government (Scotland) Act 1975. The Scottish Government’s view is that it will be clearer, for the reader, to have the full powers set out in the 1975 act, which currently lacks that. The DPLR Committee acknowledged that point. If Sarah Boyack’s amendments were accepted, that would leave the reader seeing a power in the 1975 act and noting that it lacks the usual incidental powers. The reader might easily miss the fact that there are incidental powers available for use from the act that introduced the power.
With regard to amendments 97 to 100, the Scottish Government considers that the innovative nature of the civil penalty regime will make it extremely difficult to anticipate what types of provision might require to be made as the regime beds in. It is arguable that it is not within the powers to make further provision about civil penalty notices and appeals against the penalties that are set.
In the Scottish Government’s response to the DPLR Committee’s stage 1 report, we said that we would lodge amendments. I believe—the matter is open to members’ opinions—that amendments 65, 68, 71 and 72 strike an appropriate balance between the need to allow flexibility in how powers can be used to respond to a new and complex process, and the need to maintain limits that are tied to the purposes of the act. The amendments have regard to the DPLR Committee’s views on where the balance should be struck. In conclusion, I note that although our amendments and Sarah Boyack’s amendments endeavour to do the same thing, they go about it in slightly different ways.
Andy Wightman
I have not closely studied the Delegated Powers and Law Reform Committee’s report, so it is not clear to me exactly where it recommended that there should be modifications. It would be helpful if Sarah Boyack could say whether her amendments respond directly to the recommendations of the committee or are additional.
Sarah Boyack
My amendments are intended to respond to the committee’s report. It is up to you whether we have done that effectively enough.
The Convener
It is certainly not up to Andy, because he has not read the report.
Minister, would you like to respond?
Kate Forbes
I will not, unless Andy Wightman wants to hear the exact quotation from the Delegated Powers and Law Reform Committee. However, I think that that might absorb time.
Andy Wightman
No.
The Convener
I call Sarah Boyack to wind up.
Sarah Boyack
Because I was not on the committee at stage 1, it is quite hard to get into some of the issues. However, the key issue at this point involves scrutiny, transparency and the need to get the balance right between giving ministers full powers and ensuring that they do not have additional powers that are beyond what is needed.
The one issue on which I would seek comment from the minister concerns the extent to which our amendments overlap and would achieve the same thing. Perhaps the minister could intervene to clarify that.
Kate Forbes
I firmly believe that our amendments seek to do the same thing, but in different ways. They have been drafted differently.
The situation is complicated. Essentially, the Delegated Powers and Law Reform Committee was concerned about duplication between pairs of provisions. In some cases, Sarah Boyack’s amendments would add in additional information to remove that duplication, and our amendments would remove sections in order to achieve the same thing.
Make no bones about it: we have gone about doing the same thing but in slightly different ways. I know that the Delegated Powers and Law Reform Committee considered the amendments. I hope that it had no concerns about the amendments that I have lodged, and that they would achieve the ambition.
In their drafting, my amendments and Sarah Boyack’s take slightly different approaches to dealing with duplication between pairs of provisions. Her amendments would add things, in some cases, and my amendments would remove things, in some cases.
Graham Simpson
Could I add something?
Sarah Boyack
I would be happy to hear Graham Simpson’s views, because he is on the Delegated Powers and Law Reform Committee.
Graham Simpson
I cannot speak for everyone on the Local Government and Communities Committee on this matter, but my view is that the committee would be happy with the Government’s approach. As the minister said, Sarah Boyack’s amendments seek to do the same thing as the Government’s amendments, but in different ways, so I suggest that she not press her amendments. I assure Sarah Boyack that the Delegated Powers and Law Reform Committee will consider the bill again after stage 2 and will, if it still has concerns, report back to this committee and the minister.
Sarah Boyack
That is helpful. I am conscious that the minister’s amendments went to the Delegated Powers and Law Reform Committee, but mine did not. With that in mind, I seek to withdraw amendment 86. If I think that it is necessary to do so, I will bring the issue back at stage 3. At this point, however, I am happy to support the minister’s amendments and not move the rest of mine.
Amendment 86, by agreement, withdrawn.
Amendments 29 to 35 moved—[Kate Forbes]—and agreed to.
Amendment 36 moved—[Alexander Stewart]—and agreed to.
Amendment 87 not moved.
Section 7, as amended, agreed to.
Section 8 agreed to.
09:45After section 8
Amendment 37 moved—[Kate Forbes]—and agreed to.
The Convener
I call the minister to speak to amendment 38, which is in a group on its own.
Kate Forbes
Amendment 38 will exclude a change in rent, in valuations generally or in values generally from the definition of “material change of circumstances” in the Local Government (Scotland) Act 1975. That will restrict the circumstances in which general economic factors can be regarded as being relevant to a change in valuation, which reverts back to the situation that existed prior to 1984.
The recommendation was set out by the Scottish Assessors Association in a letter to the committee dated 25 October. The basis for the recommendation was that a move to three-yearly valuations, coupled with Barclay’s recommendation to move to a one-year tone date, would ensure that valuations are much more closely aligned to current market values. The association concluded that it no longer sees the need for appeals that are based on a material change of circumstances related to economic changes.
A number of written submissions in response to the committee’s call for evidence on the bill also called for the definition of “material changes of circumstances” to be reviewed in order to improve consistency of interpretation.
Scotland was unique in the United Kingdom in having opened the door to changes in rental values being considered to be a material change of circumstances, as it explicitly allowed such changes to be considered in the Rating and Valuation (Amendment) (Scotland) Act 1984. With the significantly reduced period between valuations that the bill will introduce, the need for reviews of rateable values will be removed. Appeals are often resource intensive for all parties, so I believe that the time has come to undo the change that was made in 1984.
Amendment 38 agreed to.
The Convener
I suspend the meeting to allow members a short break.
09:48 Meeting suspended.09:53 On resuming—
The Convener
Amendment 9, in the name of Andy Wightman is grouped with amendments 10, 11 and 12.
Andy Wightman
Amendment 9 is a significant amendment. As members know, non-domestic rates are a local tax. For well over a century they were under the full control of the level of government to which they belonged—the county, region, district and unitary authorities. In the 1990s, the UK Government took away the rate-setting power from local government and centralised the power with the Secretary of State for Scotland, from whom, by virtue of devolution, the Scottish ministers have inherited it. As members know, the rate is now set by a negative instrument that is considered by the Scottish Parliament’s Local Government and Communities Committee. I believe that that is fundamentally wrong. It is a local tax. It belongs to local government and to councils, which should be given back the powers that were removed from them 25 years ago.
I consulted on the issue and other measures over the summer of 2019 and received a range of views. Local authorities, and the Convention of Scottish Local Authorities in particular, have long argued for the repatriation of rates. However, there were two issues that arose in responses and amendment 9 seeks to deal with both of them.
First, such a change will take time—I never envisaged that it would happen overnight—and there are consequential issues to sort out that need not detain us today. I have framed amendment 9 in such a way that the change can take place as late as 2024. That allows four or five years for it to be implemented. I am open minded about whether that date could be changed, but the significant point is that time has been allowed to deal with it.
As I said earlier, it is the first time in the history of 20 years of devolution that we have primary legislation on non-domestic rates, which is the second largest tax revenue under the control of the Scottish Parliament. We may not have another bill for another 20 years. If there is a desire—I believe that there is such a desire within all political parties, if not by all parties—to increase the fiscal autonomy of local government and return to local authorities what was theirs in the first place, the passage of the bill presents the opportunity to do something about that.
Secondly, some councils told me that they do not want to set their own rate. That is fine. Proposed subsection (3) would allow any council that does not want to set the rate to ask Scottish ministers to do so on its behalf. Amendment 9 is a fundamental amendment that would return us to the situation prior to 1994.
Amendment 10 is much the same, but it introduces a halfway house, in that there would still be a national rate, but there would also be regional rates. The councils could set a rate, but ministers would also set a national rate, which would be subject to the approval of Parliament. That is the only real difference between the two amendments. That is what happens in Northern Ireland, for example, where councils set one part of the rate and the Northern Ireland Executive sets the other part.
Amendments 11 and 12 are entirely different. Amendment 11 makes provision in the circumstances that there is a regional rate and amendment 12 makes provision in relation to the current situation. Amendments 11 and 12 are about the fact that the Community Empowerment (Scotland) Act 2015 introduced amendments to the Local Government (Financial Provisions etc) (Scotland) Act 1962 that allow councils to introduce new non-domestic rate reliefs. Crucially, those have to be paid for by the councils themselves.
The committee made a visit to Kilmarnock where we had a discussion with local ratepayers, councillors and council officials who expressed a desire for more autonomy on the detail of how rates were applied in their town, for example, in order to give reliefs—or even perhaps, to raise more—in specific circumstances, for specific subjects, in specific areas. They found that their powers were too blunt to enable them to incentivise the reforms and activities that they wanted to see happening in the town.
Amendments 11 and 12 would allow councils to raise the rates in a similar way to the way in which they can provide reliefs, but only up to the amount being relieved. For example, if the council wants to provide a relief scheme that is worth, say, £500,000—the ratepayers would be relieved of the liability to pay £500,000—at the same time, the council could introduce a scheme to increase the rates on other subjects, up to the same limit. It would be net cost neutral for council revenues.
The only difference between the amendments is that amendment 11 responds to the eventuality of there being a regional rate, as proposed by amendment 10, and amendment 12 applies to the current non-domestic rating system.
I move amendment 9.
Graham Simpson
I will talk about amendments 9 and 10, which are slightly different. To take amendment 9 first, Andy Wightman is trying to empower local authorities to set their own rates. He used the word “incentivisation”, and if councils were to be given that power, they would have the opportunity to set rates that can incentivise companies to come into their areas. Of course, they could do entirely the opposite. That is possibly what some businesses are concerned about. Councils could set colossal rates, which would drive businesses away. However, it is up to councils to make those decisions, so I am attracted to the amendment. We have always been a localist party, so a number of our councillors are quite keen on this idea.
10:00Kenneth Gibson
Will the member take an intervention?
Graham Simpson
I certainly will.
Kenneth Gibson
Was it not the Conservatives that brought in the pooling of rates on an all-Scotland level? I am not sure about the phrase
“We have always been a localist party”.
In fact, it was your party that changed the previous regime.
Graham Simpson
Thank you for that, Mr Gibson. Certainly in my time we have been a localist party and, when I was the local government spokesman, I drew up a manifesto for the local government elections that covered exactly that kind of point, but I will take Mr Gibson’s history lesson on board.
However, the business community has raised a lot of concerns about amendment 10. The idea of having a national and a regional rate is pretty scary to businesses, and committee members will have had a number of submissions on that. That goes too far.
At this point, we are supportive of amendment 9 but not supportive of amendment 10 or the other amendments.
Annabelle Ewing
My recollection from the committee is that COSLA was not seeking the power for councils to set non-domestic rates at this point. Its point was that it did not want this discussion to sit outside the wider discussion on a local government fiscal framework. It wanted the discussion to sit within those wider parameters, and therefore said that it believed that non-domestic rates should be considered as part of that. I am a wee bit confused as to why, given COSLA’s clear position in evidence before us, Mr Wightman feels that he has some other objective in mind at this stage.
Sarah Boyack
The amendments are timely but, like many of the amendments to the bill, they are quite difficult, because they are adding issues at stage 2—before Andy Wightman jumps up and down, I say that that is not a criticism; these are all valid discussions.
I would be interested to see the comments from different parties in Andy Wightman’s consultation, and their nuances, because my challenge is that I have not had much time to consult my party colleagues about the bill and have had different views from different people. Whether to pool non-domestic rates or give local authorities much more freedom is clearly an issue, and I can see a debate on that across the parties.
Andy Wightman, when you close, can you talk a bit more about the significance of the 2024 date in amendment 9? You talked about having five years to implement regulations. What scope is there for having a proper discussion and consultation on that? Annabelle Ewing’s point on the wider issue on local government is right; we need a consultation that joins up the dots. The problem is that the bill does not give us that and we do not have other opportunities to discuss the issues.
As the Local Government and Communities Committee, we are in pole position to join those dots, but the bill does not let us. To what extent does the committee have an opportunity to discuss that and take evidence on it before stage 3?
I am less keen on amendment 10 for other reasons. There would be a national rate and potentially an additional rate on top of that. To what extent can that proposal be seen as an opportunity for local government to raise more money? As I understand it, such a measure has led to a 20 per cent increase in the rates collected in Northern Ireland.
I am very persuaded by amendments 10 and 11, and I will support them. I like the idea that, where councils—if I understand this correctly—have collected the rates and have got their pooled rates back, they are then able to make adjustments so that, if they are carrying out a town centre improvement or regeneration project, for instance, they can lower rates in one area as long as they collect the revenue elsewhere. That gives councils more flexibility and lets them target and—hopefully—bring about more regeneration, if that is one of their priorities.
There are quite a few questions in there, but that is partly because of the nature and scale of the amendments, which could have a pretty big impact.
Kenneth Gibson
We have heard a lot of good points from everyone who has spoken, including Andy Wightman. However, I have concerns. I represent an area where, unless we have a very strong reorganisation of the local government funding formula, the measures could be extremely harmful. That is because many people in areas such as North Ayrshire and North Lanarkshire shop in Glasgow and, all else being equal, there would be a huge increase in the rates gathered in the cities and a huge fall in other local authority areas, unless the entire redistribution model is examined. That is a major concern, and that is why Annabelle Ewing’s point is so valid. COSLA needs to consider the matter in the round. We would have to have a starting point whereby, if the rates poundage went down by several million pounds in one area, the formula was adjusted. We could perhaps then move forward.
The proposals represent such a fundamental realignment of local government finance that having it in an amendment to a bill on non-domestic rates is inappropriate. The matter has been discussed for a number of years, and it will continue to be discussed, but I do not think that we should support such a move until we can sit down and consider the whole thing in the round.
Alexander Stewart
Like others, I can see some merit in amendment 9, which attempts to bring localism back into the mix. Once again, I am quite supportive of that.
Amendment 10 is a step too far. The model would disadvantage individuals and organisations. We can see the anxiety and fear on that point from some of the submissions that we have received, and the proposals could have a major detrimental effect on the business community in some sectors and in some locations. I would not be in favour of amendment 10.
Kate Forbes
I have serious concerns with the amendments. My principal concerns relate to the policy, but it is important also to highlight my concern with the drafting of amendments 9 and 10. They are technically problematic, in that they refer to and rely on amendments to section 7 of the 1975 act that have not been lodged, and amendments 11 and 12 are predicated on amendment 10 passing. Those challenges are passed on. Given the way in which the amendments are drafted, it is simply not apparent what would be required of local authorities, and the legislative implications remain unclear. In that sense, the amendments present a serious risk to the operation of the non-domestic rates system.
My primary concerns go well beyond the technical challenges in the amendments. I respect Andy Wightman’s view that powers over non-domestic rates should be returned to local authorities, but it is important to recognise that, as Annabelle Ewing said, neither local authorities nor ratepayers currently support such a change, and there has been no substantive consultation or scrutiny of the proposal. The Barclay review ruled out such a change, highlighting that
“ratepayers value this consistency”
and that
“such consistency would be lost”.
As Annabelle Ewing mentioned, COSLA has been explicit on the matter, including in evidence to the committee, recommending that discussions on the devolution of non-domestic rates should not be considered outside the discussions to develop a fiscal framework for local government. It is also worth noting that organisations such as the Scottish Retail Consortium consider it
“a retrograde step, anomalous with the thrust of the reform agenda of predictability and competitiveness.”
The natures of the economy and local economies have moved on quite considerably since 1975—not that I remember that year—so simply reinstating local rate-setting powers without giving significant thought as to how that might have an impact on individual local authority finances would not be wise. It is not clear how much flexibility individual councils would have in reality as a result of these amendments. Some will have scope to adjust rates to suit local circumstances, but others will in effect be obliged to match or undercut rates that are set by neighbouring, potentially larger, councils and accept the significant revenue risks of doing so.
I do not believe that a change of such magnitude should be taken forward without genuine consultation.
Sarah Boyack
There are periodic reviews of local government finance and, since joining the committee, I have started reading through them. Almost every Government has a review and then it gets parked. Given that there is a plea to have a joined-up approach to both council tax and non-domestic rates, what are your proposals to allow us to come back to the issue? The Barclay review was tightly constrained and you have been arguing that we should not add anything else to the bill, so when will there be a golden opportunity to come back and discuss the issue?
Kate Forbes
That is a fair question, but I do not think that this is the time to make these amendments. As you say, the Barclay review had a very specific purpose and we should not make an amendment without proper scrutiny and consultation.
The local governance review has to be done in partnership with COSLA. It must be part of the conversation about what local government finances look like in the round, including council tax, non-domestic rates and grant mechanisms. That review is on-going and COSLA is involved, and it is for COSLA as a partner in the review to inform what local government finances look like. Making these amendments to the bill would undercut that process and a change of such magnitude should be subject to analysis and scrutiny.
In that vein, I do not support the amendments.
Andy Wightman
I will make a few points in response to members. It has been COSLA’s long-standing position that it wants the repatriation of non-domestic rates. Annabelle Ewing is correct that, in evidence to the committee—although I cannot remember the person who gave the evidence—COSLA said that it does not see that happening now. I am not envisaging it happening now either. It should take place in the context of the development of the fiscal framework that I understand the Government is committed to designing and implementing in co-ordination with COSLA. It should also take place in the context of appropriate adjustments to the settlement formula; I will come back to Kenneth Gibson’s point on that.
Amendment 9 would place the commitment to repatriate non-domestic rates in the bill, but I am very relaxed about when that should be done by. If someone thinks that 2030 is better than 2024, that is fine, and we can have that discussion. If we do not make provision for it, COSLA’s desire for it not to happen now will be met, but COSLA’s longer-term desire and long-standing position is that non-domestic rates are local taxes that should be set by local councils.
If the UK Government said that it was going to set taxes that are devolved to this Parliament, I think that most parties would be quite aggrieved. Non-domestic rates are a local tax and they should be set by local councils. Amendment 9 is seeking to make such a provision, but its implementation would be delayed to give plenty of time to deal with all this, which relates to Sarah Boyack’s point. It could happen by 2024, or even by 2025, 2026 or 2028, to allow sufficient time for further discussions with COSLA about the knock-on implications of the provision, which are not particularly profound.
Kenneth Gibson talked about the change to the funding formula. At the moment, councils keep the rates that they have raised—there is a complicated system whereby they provide the net difference between that amount and the predicted amount to the Scottish Government and it is redistributed as part of the settlement. The fact is that whether councils are currently in receipt of high revenues or low revenues from non-domestic rates is already taken into account in the funding formula and, fundamentally, there would be no change to that. The only change would be that councils would be able to set their own rate.
I ask Sarah Boyack to support amendment 9 because, if we do not commit to making the change, it will probably be 20 years before we can revisit the question.
10:15Kate Forbes
On Graham Simpson’s point, and Kenny Gibson’s, did the consultation response identify simple things such as whether setting rates at council level would exacerbate income inequalities because wealthier councils would be able to raise more and poorer councils would raise less? Have all the potential unintended consequences been thought through sufficiently for us to take this step?
Andy Wightman
Perhaps not fully and sufficiently, but the point is that the existing funding formula takes account of the fact that some councils, such as the City of Edinburgh Council, have high non-domestic rate revenues, while others have low ones. All that the amendment does is to say that rate setting shall be done by the councils to which the rate belongs. There will be impacts over time—10 or 20 years—from how the power is used, but that is fine. In a similar way, we do not consider the impact on the UK as a whole when we set the devolved taxes, although perhaps we should—I do not know. However, it is a matter of principle that local government should set the rate for taxes that belong to it.
Annabelle Ewing
The member mentioned that it is a matter of principle, but I am finding the process a bit odd. Normally, there are discussions among relevant stakeholders who reach an agreement, followed by a consultation and then the legislation is drafted as well as it can be. That is as opposed to having a series of potential unintended consequences that nobody has looked at in detail. I am curious as to why you would seek to go about the process in completely the reverse order, locking in a position when, as you have just admitted, you have not fully dealt with unintended consequences, and pre-empting the discussions that are currently taking place, as the minister mentioned.
Andy Wightman
I am not doing anything in reverse. I am seeking to use a legislative opportunity—possibly the only one for another 20 years—to make a change that is broadly supported by many political parties and is a longstanding position of COSLA. If we do not make that change in primary legislation now, we will not have the opportunity unless the Government introduces legislation at some point in the future, which it has given no indication that it intends to do.
Sarah Boyack
I get the point about it being a huge change and that it is, in principle, the right way to go. Are there any opportunities in the process for the committee to pause for breath and get comments before stage 3? Andy Wightman has done his own survey, which is useful in informing him, but it does not inform the rest of us and we have not seen how it worked. When we have had complex and difficult legislation in the past, there has been an opportunity to pause for breath before stage 3.
I am not arguing for or against what Andy Wightman is trying to do. It is totally legitimate for members to come up with important and radical changes and, in the past, we have bought ourselves extra time. However, there needs to be equivalence, with our local government colleagues being party to the discussion. I take the point that it could be 20 years before we look at the issue again. Does the committee have scope to have a pause for breath on the bill? There are several amendments that I think are totally correct but which are difficult to resolve in the timescale that we have. Can the convener give me a helpful comment on that?
The Convener
We could have an evidence session on the area between the present stage and stage 3 if we thought that that would be helpful. There is scope for further evidence to be taken.
Kenneth Gibson
We would have wanted the evidence session before we got to this stage, if we had thought that the issue would be brought forward. If we are going to pluck rabbits out of hats, what was the point of all our scrutiny of the bill prior to reaching this stage?
Andy Wightman
Have I just been intervened on twice? I have lost track.
The Convener
Do not worry about how many times.
Andy Wightman
Am I winding up? I think I am.
In answer to Sarah Boyack’s question, the convener has helpfully said that it is open to the committee to take further evidence between stage 2 and stage 3. Committees have done that in the past. In response to Kenny Gibson’s point, I say that we are scrutinising the bill as presented by the Government and, as I have argued, it seeks to implement the primary legislation that is required to deliver on the Barclay recommendations that the Government has decided to implement. The Barclay review was a very narrow review, as the committee discovered when it questioned Mr Barclay prior to the bill coming before Parliament. It was very narrow and it asked one question. This is the legislative opportunity. It might be the only one for the next 20 years, so there should absolutely be discussions about this.
There are two answers to that. One is that this amendment is designed to provide the time to have those discussions and that debate. We could do something around commencement, for example: we could change 2024 to 2026. The point is that, in principle, councils should have these powers returned to them. This is not a radical change, it is just giving councils back what a centralising Government at that time sought to remove. I understand Graham Simpson’s point that, with his presence in the Conservative Party, it has moved on since those days.
Kenneth Gibson
Dark days.
Graham Simpson
Such a radical.
Andy Wightman
The Government then sought to remove powers. I remember the 1990s, when the Government was trying to fetter the freedoms of local government in many ways, such as rate capping. I think that we have moved on from those days and that parties, generally speaking, understand the need to empower the local state and give it the responsibility that virtually every local government system in Europe has. This is the opportunity to do it. I am very mindful that we need to address some technical issues with amendment 9, but if we do not commit to doing this now—
Graham Simpson
Will the member take an intervention?
Andy Wightman
Yes, I am happy to.
Graham Simpson
I take the convener’s point that the committee could, if it so chose, take some evidence on this. My view is that if this amendment does not pass today, the committee will not bother to take evidence. If it is in the bill, we might; if it is not, we will not. I guess that that point is directed at Sarah Boyack.
Andy Wightman
I thank Graham Simpson for using the opportunity to intervene on Sarah Boyack.
Finally, I think that there might have to be technical amendments to amendment 12, in terms of timescales, if members were minded to support it. However, I do not think they are, so I will leave things there.
The Convener
I take it that you are pressing the amendment.
Andy Wightman
Yes, I press amendment 9.
The Convener
The question is, that amendment 9 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
The Convener
The result of the division is: For 4, Against 3, Abstentions 0.
Amendment 9 agreed to.
Amendment 10 not moved.
The Convener
Amendment 14, in the name of Andy Wightman, is in a group on its own.
Andy Wightman
As members will be aware, taxes can be regressive, flat or progressive. With regressive taxes, the tax rate falls as the tax base increases in value. The council tax is a good example: proportionately the rate paid on high-value properties is lower than that which is paid on lower-value properties.
A flat tax such as VAT has one rate. A very wealthy person pays no more VAT than a very poor person. That is one reason why flat taxes and indirect taxes are not a very good idea—they end up being regressive in the bigger scheme of things, because poorer people pay more as a proportion of their income. Flat taxes include VAT at 20 per cent and non-domestic rates at 49p in the pound, or whatever the rate is currently.
For progressive taxes, of which income tax is a good example, the rate increases as the tax base rises. Of course, how progressive we make such taxes is a matter of political choice.
Amendment 14 would move non-domestic rates from being a flat tax to being a progressive tax. One of the problems of having a flat tax is that, if that one wants to exempt or relieve low-value properties, one has to do so through complex systems of relief, which, generally speaking, have to be applied for. A progressive system would mean that there could be a tax-free allowance: for example, we could say that no rates would be charged on the first £10,000 or £20,000 of rateable value. That approach would have the same general effect as relief schemes, but it would be simpler to implement.
Amendment 14 is fairly straightforward. It would introduce into statute the principle that non-domestic rates have to be progressive; exactly how progressive would be set by regulations. As the committee is aware, currently, an instrument that is subject to negative procedure on setting the rate is laid before Parliament each year. If amendment 85 were to be agreed to, each year Parliament would consider a similar instrument that would set the figures that are shown in the text of the amendment in steps 1, 2 and 3. Those figures are not to be debated, as such; they are merely a baseline that we could start with, and they could be amended. The critical point is that, from year to year, the figures would be amended in the same way as we do when we pass the resolution that sets the rates of income tax, in different bands, and the thresholds for that tax.
I do not think that I need to say much more. I will leave my remarks there, convener.
I move amendment 14.
Kate Forbes
If the approach that is proposed in amendment 14 were to apply, owners of properties with a rateable value of less than £60,000 would see their aggregate rates liability fall by a total of £747 million. That would mean either that three quarters of a billion pounds would be taken directly out of funding for vital local government services or that ratepayers with properties with a rateable value of more than £60,000 would need to compensate for that reduction by paying higher rates.
Non-domestic rates is a property tax. We endeavour to make it as progressive as possible, with the small business bonus scheme protecting businesses that occupy the smallest properties and the large business supplement applying to those that occupy the largest ones.
The approach in Mr Wightman’s amendment 14 would present challenges, if it were implemented. I give the example of a prosperous tech company that operates from premises that have a lower rateable value than the premises of another company that has a bigger high street base. In that case, we would be cutting the rates liability of the first company further and increasing that of the one with the bigger high street base, which might have lower turnover.
Although amendment 14 is certainly better than the previous one that I have seen on the same subject—which would have seen the Scottish Parliament building attract a rates liability figure that contained 43 zeros—it would still place an iniquitous liability on those who occupy the largest properties. As a result, I cannot support amendment 14.
The Convener
I call Andy Wightman to wind up and to press or seek to withdraw amendment 14.
Andy Wightman
In response to the minister’s last point, I stress that the previous amendment on the matter contained an error that generated some entertaining headlines.
The minister said that the Scottish Government is trying to make the current system as progressive as possible by introducing measures such as the small business bonus scheme and the large business supplement. However, that is not how to make a tax system progressive. Generally speaking, we do not do that with income tax: we do not get people to pay and then give them money back. Instead, we make the system progressive by having a set of bands, with thresholds, and rates within each threshold.
The minister mentioned numbers in relation to the impact of the figures that are set out in the amendment. I made it very clear that those figures are just a starting point and that the actual rate would be set each year. We could set figures X, Y and Z and then one would not make any calculations about the impact of such a change. The rate would be made each year, as the rate instrument was laid.
Annabelle Ewing
Will the member take an intervention on that point?
Andy Wightman
I will not, at the moment.
I understand why the minister has made that point, but I would be grateful if we could park that. It is not strictly relevant, because in my view the figures that are set out in the amendment are not baked in, but can be thought of simply as X, Y and Z.
My fundamental point is that if we want to make the system progressive, we are not going about it in the right way. The easier way to do that would be to provide a series of bands—three or four—and set rates. That would make the system progressive and give effect to the same policy intentions that lie behind initiatives such as the small business bonus scheme. For example, there could be a zero-rate band.
10:30The minister talked about a tech company on the high street and all the rest of it. Those differences already exist, because we are dealing with a property tax. I understand the point that such a system would increase the differences; that is what a progressive tax system does.
Kenneth Gibson
The committee heard in evidence about an issue with the small business bonus scheme itself, which I raised with the minister when she appeared before the committee. It is the issue of the cliff edge, whereby the scheme acts as a disincentive for many businesses to move into larger premises because they would lose the small business bonus benefits and have to pay higher rates. Would amendment 14 help or exacerbate that situation?
Andy Wightman
Kenneth Gibson raises an important point. That is one of the criticisms—there are many, in my view—of the small business bonus scheme.
My amendment 14 would be independent of such relief schemes, which are in the gift of ministers to introduce in regulations. In a sense, therefore, one should not consider amendment 14 in the context of existing relief schemes. It is legitimate to do so, but we are dealing with primary legislation.
In principle, a progressive system prevents such cliff edges, because there is no sudden move from 100 per cent relief to only 25 per cent or zero relief. In essence, the small business bonus scheme is designed as a progressive relief system in reverse—it is not progressive enough, because it still has those cliff edges. There are cliff edges in progressive tax systems, but the cliffs are not so big, and the bands and thresholds can be set in such a way as to ensure that they are not huge.
The key value in my amendment 14 is that if we want, as a matter of policy, to give relief to properties of—for the sake of argument—below £10,000, the easiest way to do that would be to put them in a zero rateable tax band. That is a better approach than putting in place a complicated series of reliefs that mean that businesses and ratepayers have to fill out forms and submit them to the council, which then has to tell the Government how much the reliefs cost and the Government pays the money to the council.
Kate Forbes
I will make two brief points. The small business bonus scheme is currently the subject of a review—I will come on to that later in relation to another amendment. The premise of non-domestic rates is that rateable value is based on the notional rental value of the property. Progression is linked to the ability to pay.
To give one example, a highly prosperous tech company that is based in very small premises could pay almost nothing in rates, whereas a business that might be making far less money but which occupies far larger premises might have to pay an amount that it finds far less affordable. The system can never be fully progressive in the way that we might imagine the income tax system is. Our relief system currently endeavours to be as progressive as possible at the edges. However, to go down Andy Wightman’s suggested route of a banding system would undermine the whole notion of basing rateable values on a notional rental value.
Andy Wightman
The valuations would continue to be made on that basis—I am not proposing any changes in the valuation methodology. My amendment 14 concerns a proposal to change the way in which the rate is structured.
The minister is correct to use the example of a small tech company, but that is an issue that arises under the current rates system. Indeed, it is currently an issue with income tax, which does not take account of the fact that somebody who earns £40,000 a year might have four children and care for two adults, and have much greater household expenditure than someone else who earns £40,000 who lives on their own with no dependants.
All those tax systems are subject to limitations with regard to those who are liable to pay the tax. The critical point is the design. In broad terms, we should move away from flat taxes and towards progressive taxes.
Annabelle Ewing
Will the member take an intervention?
Andy Wightman
I have completed my comments, so I am happy to take an intervention.
Annabelle Ewing
I am just wondering what fiscal modelling you have carried out on the fiscal impacts of your proposal.
Andy Wightman
There is no fiscal modelling to be done. As I made clear at the outset, the figures in my amendment are just baseline figures—they could be X, Y and Z instead. [Interruption.] I do not know why Annabelle Ewing is sighing. The actual rate would be set by a statutory instrument each year.
It is the responsibility of Government, which sets the rates, to do financial modelling of the impact of its proposals on tax. My proposal merely sets a framework within which, instead of there being a flat tax, there would be a progressive tax. As I said, the figures could be X, Y and Z. I am not proposing the rates: they would be proposed annually. I am providing a framework within which the rates would be set.
The Convener
Thank you, Mr Wightman. I am happy to move on and ask whether you want to press or seek to withdraw amendment 14.
Andy Wightman
I press amendment 14.
The Convener
The question is, that amendment 14 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Wightman, Andy (Lothian) (Green)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 1, Against 6, Abstentions 0.
Amendment 14 disagreed to.
The Convener
Amendment 13, in the name of Graham Simpson, is in a group on its own.
Graham Simpson
Amendment 13, which relates to the large business supplement, follows on from the recommendation in the Barclay review, that in order to make Scotland the most competitive part of the UK in which to do business, we should align the rate with that in England.
The large business supplement is paid by all properties with a rateable value over £51,000. The rate in Scotland is 2.6p while the rate in England is 1.3p. The Barclay review said that the rate in Scotland should be reduced so that it is in line with the rate in England. The Barclay review report states:
“our decision to recommend the supplement is reduced is in the context of current Scottish Government policy to ensure that Scotland is the best place to do business in the UK ... Several consultation responses raised the issue of the rate of the Large Business Supplement. Most noted the difference with England. In talking to ratepayers and business groups, we have noted a widely held perception that the difference in Large Business Supplement means that Scotland is not as competitive a place for businesses as England currently is. A large majority of the tax base—in terms of tax revenue received at least—sees their ... bills determined by a higher tax rate in Scotland than they do in England”.
The Scottish Retail Consortium has said of amendment 13:
“Of the 22,000 premises affected some 23% are retailers ... costing these retailers alone £13.95 million extra annually. This higher rate makes it more expensive to operate on our high streets and retail destinations and raises the hurdle for attracting commercial investment. This amendment appears to seek to place a cap on the large business rates supplement”—
it would do that—
“so that it is no higher than that which applies down south”.
Annabelle Ewing
Will the member take an intervention?
Graham Simpson
I am just closing. Amendment 13 is also backed by the Scottish Wholesale Association and the Confederation of British Industry Scotland.
I move amendment 13.
Annabelle Ewing
I tried to intervene, but Graham Simpson did not want to take the intervention.
I am curious; it appears to me that here, in this devolved Scottish Parliament, under amendment 13 we would actually be saying, on an issue that is devolved, “No—we don’t want this power any more. Thank you very much, but we’re going to hand the power to set maximum thresholds back to the Westminster Parliament.” I find that absolutely astonishing.
Kenneth Gibson
Yes—it is a complete nonsense. At the end of the day, of course there is a strong argument for reducing the level of supplement, but the current or a future Scottish Government might wish to do that, or to increase it. That would depend on Scottish circumstances. We should not be tied to what is done south of the border. That is the whole premise of devolution. I oppose the amendment on that basis alone.
Andy Wightman
Amendment 13 is not about handing powers back to Westminster. If we agree to it, we will still have the power to change things in the future.
My problem with amendment 13 is twofold. First, the rate for the large business supplement is subject to secondary legislation, which means that it is subject to periodic parliamentary scrutiny. I understand that ministers may, if they wish, introduce other supplements by regulation. That is flexibility in the system. Secondly, I think, as a matter of principle, that it is a poor idea to set out such constraints in primary legislation, particularly if the constraint is tied to the legislative provisions in another jurisdiction.
Sarah Boyack
For me, it is a question about the point of devolution. This is a choice that we should make in Scotland. We should have a debate about this. Amendment 13 should not be included in the bill.
I take Graham Simpson’s point about the pressure in the retail sector, but one of the things that we are not really looking at is online retail and the need for a fairer tax system in that regard. Amendment 13 would not solve that.
Kate Forbes
The Barclay review did not recommend giving control of the large business supplement cap to the UK Government. Who knows what might happen after 12 December? Who knows what we will be connected and linked to? That highlights the core principle that is at play here and the problem with the proposal. Although Barclay called for a reduction in the large business supplement when that is affordable, and the Scottish Government committed to that, I would not support tying our tax policies, particularly with regard to something like the large business supplement cap, to UK Government decisions.
I cannot support Graham Simpson’s call for control of a maximum threshold to be handed to the UK Government. In fact, his amendment 13 would restrict that threshold to the rate that is set by local authorities to fund local economic development projects.
The rates should be controlled in Scotland and should not be determined by whatever rates are set—or not set—south of the border.
The Convener
Mr Simpson, would you like to wind up?
Graham Simpson
No. [Laughter.] I certainly appear to have wound up Annabelle Ewing—not for the first time.
Annabelle Ewing
And others.
Graham Simpson
And others—yes.
My amendment 13 is not about handing power back to Westminster—of course it is not, and members are aware of that. However, having heard the comments around the table, I think that the point has been made that we do not want Scotland to be uncompetitive with the rest of the UK. I accept that the issue is probably a budgetary matter and not a matter for the bill. Therefore, I will not press amendment 13.
Amendment 13, by agreement, withdrawn.
The Convener
Amendment 39, in the name of Alexander Stewart, is grouped with amendment 88.
Alexander Stewart
Amendment 39 will bring additional scrutiny and transparency to the valuation process. Although the non-domestic rates system predates devolution, there is a strong argument that members of the Scottish Parliament should have a role in the system.
The Barclay review urged Scottish assessors to improve and standardise their processes on rate payments, and ministers have been keen to highlight that the bill will not deliver as it should, specifically in relation to a more frequent evaluation cycle, without administrative reforms.
An annual report that was collated by ministers and presented to the Scottish Parliament would give MSPs an opportunity to scrutinise the operation of the non-domestic rates system. That, in itself, would enable there to be additional scrutiny of the operation of the rates system.
I move amendment 39.
Sarah Boyack
Like amendment 39, amendment 88 is concerned with the importance of additional scrutiny and of reporting back to Parliament. I reflected on the issue and thought that a three-year period would probably be appropriate. I note that issues came up in our stage 1 report about pressures on the system. Further, we are dealing with a new piece of legislation, and there might be additional issues that arise as a result of that. It seemed to me that, in terms of ensuring that there were reports back from assessors and in relation to issues around capacity and numbers, input from the Scottish Government to collate the information and present it to the Parliament would be helpful with regard to transparency.
I had not seen Alexander Stewart’s amendment when I lodged mine, but I thought that a three-year period would be appropriate, because that would give us a bit of time to consider the impact of the legislation and make it a priority for our committee or another committee to consider the issue.
10:45Andy Wightman
Amendments 39 and 88 are useful and raise some good points. I will preface what I say by reminding the committee that valuers are professionals and they undertake their valuations on the basis of professional standards.
The issue concerns me a little bit. Of course, if you go to the Scottish Assessors Association website, you can see from its practice notes how it values everything from crematoria to nurseries, bowling greens and whatever other properties it values.
Some of the issues that come before this Parliament and some of the concerns that members have relate fundamentally to valuation methodologies, rather than to any legislative provisions or Scottish Government policy. I am persuaded that it would be useful to make a statutory requirement that valuation boards provide a report to be laid before Parliament—not annually, but certainly periodically—which would, among other things, flag up issues, problems and all the rest of it. I presume that that information is probably already feeding through to Government, but it is not visible to members, and it would be helpful if it was.
I am not clear—perhaps Alexander Stewart could reflect on this when winding up—what amendment 39 would do. It says that there should be a duty to report
“as soon as practicable after the end of each financial year ... on the effectiveness of the valuation process”.
It is not clear to me how the
“effectiveness of the valuation process”
would be assessed. I presume that if I was a professional valuer, I would, on completing a valuation, submit a report saying that it was effective. It is not in clear what is being sought in the amendment, and perhaps Mr Stewart can come back on that.
Sarah Boyack’s amendment 88 is not similar but rather different from amendment 39. Its subsection (1) would restrict reporting to
“a report to Scottish Ministers on the number of assessors and depute assessors holding office”.
That would be a straightforward report, because there are 10 assessors and two depute assessors, or whatever the numbers are, so that provision appears to be overkill.
Amendment 88’s subsection (2)(b) says:
“The Scottish Ministers must lay a report before the Scottish Parliament that—
(a) collates the reports”
and
“(b) considers whether there are—
(i) sufficient assessors ... to enable the fulfilment of the legislative functions of assessors, insofar as they relate to non-domestic rates”.
Assessors do not just deal with domestic rates; they deal with council tax and maintain the electoral roll.
I am not entirely clear what either amendment is trying to do. However, I have said that there is merit in valuation boards laying a report before Parliament, maybe every three or five years. That would give boards the opportunity to highlight issues that have arisen in the valuation process, which would be beneficial to members. However, neither amendment does that.
Graham Simpson
Amendments 39 and 88 call for duties to report on two different things, but they are essentially about one thing: transparency. I am certainly happy to support both amendments, but they probably need a bit of work. Perhaps Alexander Stewart and Sarah Boyack could get their heads together before stage 3 and come up with a joint proposal.
Sarah Boyack
I would certainly be happy to do that. I take the points made by Andy Wightman and Graham Simpson. I would also be happy to work with the minister. If members are happy to push through the amendments, we could come back and take a final view on the matter.
The issue is transparency and proportionality, so I appreciate Graham Simpson’s comment.
Graham Simpson
I will finish on that note.
Kate Forbes
My initial thoughts were that the Scottish Government was being drawn into matters that are best left to local authorities to review and determine. However, I think that Sarah Boyack’s amendment 88 in particular has merit. I appreciate Alexander Stewart’s amendment 39, but I think that, on balance, I would support Sarah Boyack’s amendment and not his.
I would be happy to meet both members to work on and adjust whichever amendment is agreed to. However, it is important to identify that assessors are independent professionals. Their role is to carry out valuations in accordance with law. They are independent of Government, which has no remit—nor should it—to intervene in that process.
The process of valuation is obviously extremely complex and technical and should remain under the purview of rating experts, surveyors and solicitors.
It is not necessary for reporting to be annual, which is why, on balance, I support Sarah Boyack’s amendment 88. Annual reporting would mean a considerable amount of work for little gain, whereas reporting every three years would be more relevant to the nature of non-domestic rates.
We support amendment 88, but if both members are willing to work with me, we could fine-tune the proposal and make adjustments to it.
Alexander Stewart
We have had a useful discussion. My goal was to bring additional scrutiny and transparency to the process, which would be valuable and is what Barclay wanted. I appreciate that the professionalism of the assessors is important to the process. There is merit in looking at the issue. I hear what the minister is saying and I acknowledge Sarah Boyack’s point about time being required. I am live to the discussion and I am more than happy to have further discussions as we progress the bill, so that we get more transparency and scrutiny, the Scottish Parliament gets a role and MSPs have an input to the process. That is what is expected of us.
Amendment 39, by agreement, withdrawn.
Sarah Boyack
I will not move amendment 88 on the basis that there is ministerial and cross-party support for us to lodge another amendment at stage 3.
Amendment 88 not moved.
Before section 9
The Convener
Amendment 3, in the name of Andy Wightman, is in a group on its own.
Andy Wightman
In its annexes, the Barclay review report contains a number of issues that Barclay looked at but did not make formal recommendations on. One of those is in annex C7, which is titled “Ensuring that every ratepayer pays something”.
The principle is straightforward—it is one of accountability. Barclay describes “rates deserts”, which are locations where nobody contributes anything to the costs of running and delivering the public services that the owners and occupiers of property depend on, including the roads by which their customers reach them and on which they make deliveries, the amenities that enhance property values, and the planning and infrastructure that enable their workers to have housing.
The principle that everybody should pay something, albeit a modest amount, is important in building the link between non-domestic property occupiers and the councils that provide the services on which they rely.
Relief schemes such as the small business bonus are separate from all this, but if their effect is to take thousands of people out of a system so that they pay nothing whatsoever, they will begin to undermine the important relationship of accountability between non-domestic property occupiers and local authorities, which has existed for well over a century.
Amendment 3 would insert a “mandatory minimum payment”. It does not seek to eliminate any relief schemes, although its effect would be to adjust from 100 per cent to 97.5 per cent the relief that is available under the small business bonus scheme. It would ensure that every ratepayer would pay something. As the amendment is drafted, that amount would be
“2.5 percent of the valuation of the lands and heritages”,
so a property with a valuation of, say, £10,000 a year would be liable for £250. I am open to debate on exactly how that would be set—it could be a flat rate—but I am more interested in a discussion on the principle, which I advocate. Everybody paying something is an important principle for the rates system and amendment 3 would give effect to that.
I move amendment 3.
Graham Simpson
Andy Wightman mentioned relief schemes, and I think that amendment 3 would meddle with relief schemes.
Some businesses do not pay anything under the small business bonus scheme, but Andy Wightman is suggesting that everyone should pay something. He is suggesting too fundamental a change. It would be a massive change to the system and its introduction could be damaging to some businesses, so I am not supportive of it.
Annabelle Ewing
I agree with that. I am supportive of the small business bonus scheme. From my constituency, I absolutely know the difference that it makes to allowing shops to continue to exist. The committee has referred on many different occasions and in many different contexts to the state of high streets, and amendment 3 would damage rather than help the high street. I do not know what modelling Mr Wightman has conducted; he did not refer to anything specific. I will not support amendment 3.
Alexander Stewart
I concur. Amendment 3 would be detrimental to a number of businesses on our high streets. We should be doing all that we can to encourage, support and rejuvenate those locations within our communities and constituencies, so that they can flourish. The provision in amendment 3 would be a real burden. It would jeopardise development opportunities and the business community’s ability to move forward, so I cannot support it.
Kenneth Gibson
Once upon a time, amendment 3 would have been quite a good suggestion, but we are many years past that. The retail sector in particular is under severe pressure, so it is the wrong measure at the wrong time. We also have to consider that it would impact on charities and others, and we should bear in mind Sarah Boyack’s earlier point about online retailing. Amendment 3 would only exacerbate online retailers’ advantage over high street retailers. I therefore oppose amendment 3.
Kate Forbes
Amendment 3 would create a rates liability for more than 142,000 properties. I am very supportive of the small business bonus scheme. I see its impact at not only the ministerial level, but the constituency level, in allowing small businesses in particular to reinvest.
It is perfectly legitimate to have questions about the small business bonus scheme and to ask whether it is achieving its aim of revitalising local economies, which is why we commissioned the Fraser of Allander institute to review the scheme. It is accepted that improvements can be made to ensure that the scheme supports small businesses. It would be wise to wait for the outcome and recommendations of that independent review, rather than consider the imposition of a minimum rates liability on the properties that benefit from the scheme.
There are other rates relief schemes in operation. For example, the business growth accelerator relief, which encourages investment in property stock, and 100 per cent relief for telecoms masts, to encourage improvements in digital connectivity in Scotland. All those areas would be subject to a rates liability under amendment 3. The reason that those reliefs exist is to incentivise investment and support particular policy decisions to aid high streets and the small businesses on them.
Consequently, I do not support amendment 3.
Andy Wightman
I am slightly bemused by committee members’ responses to amendment 3, including the claim that it would bring about a massive change. It would be an incredibly minor change to the rating system. As I made clear at the outset, amendment 3 is about a principle of accountability.
The minister talked about the small business bonus scheme review and wanting to wait. Again, we will wait and the ship will sail, the bill will be passed and we will have missed another legislative opportunity to put in place the principle that every ratepayer should pay something.
I am not a fan of the small business bonus scheme in the way that it is designed. Some of the wealthiest people on the planet who own land in Scotland are paying nothing as a consequence of it. In Lothian region, there are plenty of premises that, after the rates thresholds have gone up, have become vacant and been let again at a higher rent despite the fact that the owners are paying no more than they were before. The problem is that those higher thresholds get capitalised into the value of the property for the owner. That is always the problem: when we relieve fixed assets, such as property, of a liability to pay tax, it ends up being incorporated into the rent and enriching the owner.
11:00Notwithstanding that point, there is a review under way and I agree with the minister that we need to wait for its outcome. However, amendment 3 is not directly related to that review. Whether there should be reliefs or not is one question. I am proposing a minimum payment that everyone pays on an annual basis, to remind them that they depend upon the services of local government. I am introducing that simple principle.
Annabelle Ewing made a point about the impact of that change. The figures that were given by the Barclay review show that it would raise about £30 million. I do not think that paying £250 a year for a property valued at £10,000 is going to break the bank. If we set the rate too low, the principle might be observed, but the costs of collection would outweigh the revenue that was generated, so we cannot do that. I am open to how one decides that value, but I am more interested in the principle. I will press amendment 3.
The Convener
The question is, that amendment 3 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Wightman, Andy (Lothian) (Green)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 1, Against 6, Abstentions 0.
Amendment 3 disagreed to.
Section 9—New or improved properties: rates relief
The Convener
Amendment 89, in the name of Sarah Boyack, is in a group on its own.
Sarah Boyack
The business growth accelerator relief, which reduces rates for businesses that have invested in improvements, has been applied in different ways across Scotland. Amendment 89 seeks to highlight the different ways in which it is implemented. I want there to be a requirement for the Scottish ministers to give greater clarity, partly to encourage people to use the business growth accelerator relief and partly to raise awareness among local authorities and businesses about how it works.
Amendment 89 seeks to provide more clarity about and increase the awareness and raise the profile of the business growth accelerator relief.
I move amendment 89.
Kate Forbes
I will identify my current concern and then offer Sarah Boyack the opportunity to consider the matter ahead of stage 3. We agree that reliefs should be accompanied by appropriate guidance for councils and ratepayers alike. We publish non-statutory guidance for all reliefs, which is compiled with the involvement of officers from COSLA and the Institute of Revenues Rating and Valuation. The guidance is updated regularly.
The complexities of the business growth accelerator relief, which amendment 89 relates to, lie in the identification of eligible properties. That goes back to a previous amendment. We introduced section 3 to provide for assessors to mark the valuation roll for newly built and improved lands and heritages. Assessors operate independently of ministers and it is a matter for the assessors to interpret and apply valuation legislation. The Government has no locus either to intervene in that process or to issue guidance to assessors.
Section 9 allows the Scottish ministers to make regulations creating relief for newly built and improved lands and heritages. The mark is there to provide councils with a means of identifying the properties that will be eligible for relief. The intention is that the regulations will specify amounts and durations of relief.
I am open to being persuaded that there is a need for statutory guidance to be issued to local authorities in that scenario. It would be unusual in the context of how we approach guidance for other reliefs, bearing in mind the important distinction between Government intervention and the independence of assessors.
Although I cannot support Sarah Boyack’s amendment 89 as drafted, there are some points that could be explored further in relation to how we issue guidance, perhaps leading to a more nuanced amendment.
Sarah Boyack
If no member has a comment to make, I would be happy to seek to withdraw amendment 89 and to bring it back at stage 3, following discussions with the minister.
Amendment 89, by agreement, withdrawn.
Section 9 agreed to.
After section 9
The Convener
Amendment 90, in the name of Sarah Boyack, is grouped with amendments 91 and 92.
Sarah Boyack
Amendments 90 to 92 are intended to address two of the major challenges of the day: the climate emergency and the challenge of encouraging businesses to adopt business strategies that would be good for our economy. The Scottish Government’s programme for government uses the tags of making Scotland “greener” and “fairer”, and that is what my amendments attempt to do.
We need much more joined-up government, including in relation to how we craft and implement our tax policies. Amendment 90 aims to encourage the owner, company or tenant to be more sustainable, and it gives examples of how they could be incentivised to do that through a reduced NDR payment. I am arguing not that businesses would automatically be exempt from payment, but that they could be offered a discount. I have left it to the Scottish Government to determine the level of the discount and the details of the scheme.
In amendment 90, I have listed as potential sustainable business practices
“reducing waste ... reducing greenhouse gas emissions ... procuring goods which are ... produced locally to the lands and heritages”
and
“environmentally sustainable”.
I have also included the use of energy from
“zero emission sources, as well as energy saved through energy efficiency measures.”
I have provided for the Scottish Government to produce regulations and to detail how those regulations would be implemented, including the periods for which relief would be available and who would be eligible. Given the climate emergency, it could be determined, for example, that such relief would be available for the next five or 10 years, to stimulate action, or a longer period could be stipulated. It would be up to the Government to consider the detail of that.
I have proposed that the regulations would be subject to affirmative procedure, so that they would be given full consideration by Parliament.
In amendment 91, I have set out my proposal for enabling those who practise positive business practices to qualify for rates relief. I have suggested that positive business practices would include
“not using zero hours contracts ... the payment of a living wage ... practices which have a positive effect on the ... local economy ... environment”
and
“the use of district heating.”
Amendment 92 would add a new section containing provisions on the contribution that was made to the net zero emissions target,
“including through investment in district heating”.
I have deliberately future proofed the wording so that other zero carbon investment that would achieve the same aims could be covered. I am very conscious that promoting low-carbon heat is currently a key objective, but that a range of alternative technologies and approaches might be developed in the future.
Although we have innovative low-carbon heat networks in Scotland, they have been slow to get off the ground, they are expensive to construct and they do not make huge profits, particularly if they provide heat that businesses and households can afford to use. Moreover, local authorities face major disincentives in promoting heat networks because of non-domestic rates.
Interestingly, that issue was raised by a Glasgow Scottish National Party councillor, who said:
“District heating systems have clear potential to deliver cheaper, cleaner energy into people’s homes ... But the way district heating systems are treated in the local tax system acts as a deterrent to them being used more widely ... under present rules, installing district heating systems brings in significant new non-domestic rates and that adds unduly to the cost of heating homes.”
She said that the Scottish Government agreed to a specific rates rebate for the Commonwealth games village, but that
“until district heating systems are competitive with conventional gas heating we won’t be able to move forward.
We need the government to cut through this problem if district heating systems are to contribute to the city’s drive to achieve carbon neutrality.”
I do not think that that is an issue only in Glasgow; it is one that affects the whole of Scotland.
I hope that colleagues will support my amendments, which address issues that are at the forefront of the challenges that we face in Scotland and provide incentives to deliver the change that we need now, and not in a generation. Crucially, they have been crafted to give ministers flexibility in how to proceed with the proposed approach.
I move amendment 90.
Andy Wightman
I have a couple of brief comments to make.
I have a lot of sympathy with the intention behind the amendments, but I think that ministers already have the power to design and introduce relief schemes if they so wish. Therefore, if they were minded to introduce relief schemes along the lines that Sarah Boyack has proposed, they have the power to do so. Maybe the minister can address that point. Notwithstanding that, there is always some benefit in drawing specific attention to ministers’ powers to achieve certain things in order to encourage them to do so.
Sarah Boyack talked about flexibility in terms of the rates relief and periods of eligibility, and that will be critical. Ultimately, as is set out in amendment 90, we want everyone to reduce waste, reduce greenhouse gas emissions and procure goods in a more environmentally sustainable way. If the relief was granted, however, no one would pay rates and public revenues would fall. It is arguable that the rates bill for Parliament, for example, would collapse, because we have reduced waste and greenhouse gas emissions, we do local procurement and all the rest of it.
That is not an argument against the scheme; it is a point to strengthen Sarah Boyack’s point that we will have to design it carefully. There will have to be an incentive to achieve certain outcomes, which, after they are achieved, would mean that the relief was withdrawn. As we have just discussed when we were talking about the small business bonus scheme, once a relief is introduced and people are paying 50 per cent less tax or no tax, it is politically challenging to tell them that they will now have to pay it.
Those are just some observations.
Graham Simpson
Amendment 90 is a positive idea that we could have rates relief if we do things such as reduce waste and greenhouse gas emissions and so on. We would all support that. However, I take Andy Wightman’s point that people could do all those things and end up paying nothing. However, the amendment says that ministers should make the provisions through regulations. This is one of those amendments that is good but probably needs more work, so I think that we can support it at this point, with that proviso.
The same cannot be said of amendment 91, which deals with the same idea but in relation to positive business practices. How on earth do you define a “positive business practice”? What Sarah Boyack considers to be a positive business practice might not be what I consider to be a positive business practice.
Sarah Boyack lists a few things in amendment 91. It is quite a bizarre mix, going from zero-hours contracts to the use of district heating. Members will have different views on zero-hours contracts, but places such as ski centres in Scotland would say that they need people on zero-hours contracts. For them, that is a positive business practice, but for Sarah Boyack it clearly is not. There are issues with amendment 91, so we cannot support it.
Amendment 92 falls into the same category as amendment 90, so we are happy to go along with it.
Annabelle Ewing
I am interested in Sarah Boyack’s approach, but I see that there are a number of practical difficulties with it. This goes back to the idea of using stage 2 of the bill process to come up with all this stuff without any detailed consultation or working through the issues carefully and comprehensively. I am concerned about tagging stuff on at stage 2, because I have a host of questions about these amendments.
What is “fairness”, and fairness for whom? Who will assess compliance on all this? What is the machinery for that and what impact will it have? What council money will have to be behind it? The idea is not a bad one, but I do not think that tagging it on at stage 2 without all that work being done is the best way to go about it.
Taking the approach would have many implications for people who are trying to run a business, particularly a small business. Launching it without the Federation of Small Businesses and others having the opportunity to give a detailed response is not really a fair way to proceed. At this stage, therefore, I would find it difficult to support the amendments in their current form.
Kate Forbes
I will speak to all the amendments, and the principles that I will identify are relevant to each of them.
I do not think that anybody would dispute the sentiment behind the amendments. Indeed, I say to Andy Wightman that the Government already uses non-domestic rates to support renewables, including through district heating relief, 60 per cent relief for small-scale hydro schemes and relief for renewable energy generation where there is a community interest. Those reliefs are unique, or are more generous than any equivalent reliefs in the UK.
The Scottish Government is, of course, a strong proponent of fair work. That includes the living wage, which we support through the Scottish business pledge, to encourage fair practices by all businesses.
11:15We also have the new legally binding annual targets on climate change, with the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 setting a target of net zero emissions by 2045. It is important that we look at every aspect in considering how we will support those ambitions. However, I do not believe that primary legislation on non-domestic rates—which are, as has been said, a property-based tax—is the best way to address our wider ambitions. Apart from anything else, such a system would be hugely burdensome in practice and open to abuse.
Andy Wightman
Can the minister clarify whether I am correct in arguing that, as a matter of law, ministers—if they wish to do so, for the sake of argument—already have the powers in existing legislation to introduce relief along those lines?
Kate Forbes
Yes, we already have the powers to create reliefs along those lines and other lines as we wish. I opened my comments by talking about district heating relief and small-scale hydro scheme relief.
There is another element. Committee members have already expressed frustration when I talk about reviews that are further down the line, but I note that we have committed to a review of plant and machinery valuations, with a particular focus on renewable energy sector valuations. I expect that the review will explore a number of concerns in detail and will make proposals about how we support renewable energy through reliefs or otherwise.
Non-domestic rates reliefs are typically administered on the basis of objective evidence-based characteristics of the property, such as its rateable value or the purpose for which it is being occupied. One example is the small business bonus scheme, which is based primarily on rateable value, whereas nursery or charity relief requires the property to be used wholly or mainly as such. Some reliefs are location based, and even those are based on objective facts and evidence.
I come to the points that were raised by Graham Simpson and Annabelle Ewing. To administer reliefs on the basis of a subjective or transitory feature of the property or occupier, such as positive or sustainable business practices, would increase the administrative burden substantially. In addition, such concepts are ultimately subjective, so even if councils were able to gather information on such practices—potentially at a significant time cost to them—there would be different interpretations across local authorities.
Councils would also need to be significantly resourced to increase their policing, because otherwise the provisions would be ripe for abuse. For example, an occupier could procure local goods on the day that they applied for and were assessed for the relief and then source those goods from sweat shops during the rest of the year. They would still be eligible for the relief in those circumstances. Similarly, an occupier could provide evidence that they were meeting the living wage at a certain point, and councils would struggle to verify the evidence and to monitor the situation over time.
I could go into further detail on an operational level. Businesses would be required to provide evidence frequently to councils on their practices. Those considerations would need to be assessed and costed, and local authorities would need to be consulted on the implications for workload.
I would like to think that we are trying to address some of Sarah Boyack’s concerns through alternative measures that are already in place, but I cannot support the amendments, for the reasons that I have highlighted.
Sarah Boyack
I appreciate colleagues’ comments, but nobody has really disputed the fact that we need to act. As I understand it, the evidence is out there. For example, some people are putting in district heating systems and are having non-domestic rates applied, which puts them off developing such schemes.
The minister commented on my amendment 91 about progressive business practices. She said that someone could pay the living wage on one day and not do so for the rest of the year. However, there are already schemes in which people sign up as living wage employers, and they do not let people sign up for only one day. There are alternative ways in which people could demonstrate that they have met the requirements that would not be time consuming for councils and would be possible to apply.
I have not really heard why the objectives behind the amendments are wrong. They address two of the key issues of the day with regard to fairer and greener businesses and they are practical. For those reasons, I will push them. I press amendment 90.
The Convener
The question is, that amendment 90 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 3, Against 4, Abstentions 0.
Amendment 90 disagreed to.
Amendment 91 moved—[Sarah Boyack].
The Convener
The question is, that amendment 91 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 1, Against 6, Abstentions 0.
Amendment 91 disagreed to.
Amendment 92 moved—[Sarah Boyack].
The Convener
The question is, that amendment 92 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
The Convener
The result of the division is: For 4, Against 3, Abstentions 0.
Amendment 92 agreed to.
Amendments 11 and 12 not moved.
The Convener
This is an appropriate point at which to conclude today’s meeting, as consideration of the next section would take up considerable time. I apologise to Liz Smith—we thought that we would get to it a bit earlier than we did. Due to other circumstances, we have to finish the session at a quarter to 12, so we would not be able to give the next section our due diligence.
That concludes today’s meeting. Any remaining amendments to the parts of the bill that we have not reached today should be lodged by 12 noon tomorrow.
11:22 Meeting continued in private until 11:49.27 November 2019
Second meeting on amendments
Documents with the amendments considered at this meeting held on 4 December 2019:
Second meeting on amendments transcript
The Convener
Under agenda item 3, the committee will consider the Non-Domestic Rates (Scotland) Bill at stage 2, on day 2. I welcome Kate Forbes, who is the Minister for Public Finance and Digital Economy, to speak to and move amendments on behalf of the Scottish Government, and I welcome her officials. I also welcome Liz Smith, who has amendments to speak to. The intention is to finish stage 2 today; we have enough time, I hope, to do so.
Section 9 agreed to.
After section 9
The Convener
Amendment 73, in the name of Liz Smith, is grouped with amendments 74 to 83.
Liz Smith (Mid Scotland and Fife) (Con)
Amendment 73 is about the equality of charities, which Mr Martin Tyson of the Office of the Scottish Charity Regulator raised as an issue when he gave evidence to the committee. He said:
“Our concern is that”
the proposal about section 10 of the bill
“goes to the basis of what the charity law in Scotland says a charity is ... For a long time, the assumption has been that any tax reliefs or rates reliefs apply equally to all charities, across the board. There are not some charities that are more charitable than others.
Our main concern is that we could start getting a blurring around the edges of what a charity is and of what the public ... understand a charity to be.” —[Official Report, Local Government and Communities Committee, 19 June 2019; c 10-11.]
He went on to say that it was not clear why anybody would want to create that ambiguity, which would introduce differentiated treatment and be likely to open up legal challenges.
As members know, section 4 of the Local Government (Financial Provisions etc) (Scotland) Act 1962 provides for
“Reduction and remission of rates payable by charitable and other organisations”.
As it stands, that section does not provide for any differentiation in how charities are treated in terms of their eligibility for reduction or remission of rates. Therefore, without section 10 of the Non-Domestic Rates (Scotland) Bill, charities would continue to be receive equal rates relief treatment. With that in mind, amendment 73 seeks to provide beyond doubt that all charities should be treated equally for rates relief.
Amendments 74, 75 and 78 are to do with rates reliefs for nurseries in independent schools. In combination, the amendments seek to provide that nurseries in independent schools will still be eligible for rates relief, putting them on an equal footing with private nurseries that are not in the independent school sector.
It is wholly anomalous to make legislation that removes charitable relief on business rates for not-for-profit charitable institutions yet allows private profit-making nurseries to continue to enjoy rates relief.
When responding, I ask that the minister explains the logic behind that decision, especially in terms of the pressure that the Scottish Government is under to deliver its 1,140 hours policy, to which independent schools, particularly the larger urban day schools, contribute.
The amendments provide that lands and heritages that are related to the provision of nursery classes in an independent school will be entered separately into the valuation roll and will be eligible for rates relief.
Amendments 76 and 77 are about the provision of education to children with additional support needs in mainstream independent schools. The amendments provide that mainstream independent schools will still be eligible for rates relief, if they deliver education to pupils with additional support needs who have been
“selected for attendance at the school ... by reason of those needs”.
I see no reason why their needs should be classified differently from those of pupils at schools that are currently named as special schools.
Amendment 79 would leave out section 10. The minister is well aware why the independent schools sector is so strongly opposed to section 10; most especially, it does not consider that any comprehensive cost benefit analysis has been carried out. The evidence for that is the weak financial memorandum.
The minister persistently says that she values the high standards of education that is provided by the independent sector, and that it is an important part of Scotland’s education system. Indeed, on the previous occasion when many such issues were considered, during the passage of the Charities and Trustee Investment (Scotland) Act 2005, much more detailed analysis was provided to assess the significant public benefit that is delivered by Scotland’s independent schools, which resulted in unanimous agreement across Parliament. If that support remains, as the minister insists it does, and given that the Scottish Council for Independent Schools states that the independent sector provides £51 million in financial support, it would surely have been appropriate to have carried out an accurate and comprehensive financial assessment.
However, this is about more than that. The proposed policy move has significant implications for the state sector, which should not be forgotten in the financial considerations and, indeed, in relation to the availability of places and teaching resources.
Annabelle Ewing (Cowdenbeath) (SNP)
I hear what Liz Smith is saying, but I am a wee bit confused about why that is her conclusion. Why would there be a negative impact on the state school sector?
Liz Smith
That is because the state sector would inevitably be asked to place children from independent schools whose parents were no longer able to afford the fees. We know from many of their letters that headteachers in the independent sector anticipate that they will lose some of their pupils if there are fees increases. Those pupils have to be educated somewhere, so there would be an impact on the state sector.
The minister is also well aware that there are issues to do with the likely impact of the policy move on availability of bursary provision. It could have a detrimental effect on the ability of some schools not only to offer bursaries, but to offer their other facilities for public benefit. That is particularly true for many of the smaller schools.
To my mind, such schools face a very difficult situation. Without exception, there are likely to be considerable increases in fees and therefore fewer parents will be able to choose independent education, which means that independent education is likely to become more elitist and parental choice will be reduced. That is the exact opposite of Scottish Government policy and of what Parliament agreed to in 2005.
Amendments 81 to 83 are about the timing of the commencement of section 10. Amendment 81, which is a paving amendment, sets out that the Scottish Government ministers’ power to make regulations on the commencement of the bill’s provisions would be subject to the provisions of one or other of amendments 82 and 83.
Amendment 82 provides that regulations bringing the section into force cannot be made until after the next revaluation year, which, as the minister knows, is 2022. Ministers have already initiated some discussions about that, and they intimated that they are willing to listen to the sector’s call for a short delay to implementation. It makes sense to ensure that the start date follows rather than precedes the new revaluations.
Amendment 83 recognises the provision of amendment 82. In addition to those provisions, it provides that the Scottish ministers must conduct a consultation after the bill receives royal assent and lay a report on that consultation before Parliament before making the regulations.
I move amendment 73.
Graham Simpson
Amendment 80 deals with the date on which section 10 would come into force. It gives the committee another option, if it was minded to agree that there should be a delay in introducing section 10. The committee is essentially faced with a choice between Liz Smith’s amendment 82, which would delay commencement until 2022, or my amendment 80, which would simply delay it until 1 August 2021, which is the start of the school year, which seems a natural point in a school’s business. I much prefer Liz Smith’s amendment 82, but I am giving the committee a slightly softer option.
09:15We have heard that some—not all—independent schools are in a perilous position. I am certain that the minister does not want schools to close, because I have heard her say so, but if we continue with the bill as it is, that could be the effect. Certainly, some smaller schools could close, which could lead to the situation that Liz Smith described in which the kids who go to those schools would enter the state sector. Of course, as we have heard, sadly, the Government has done no financial planning on that. I will therefore be happy to move amendment 80 when the time comes.
Andy Wightman
I have a few comments on section 10. I support its overall intentions. In principle, I believe that all non-domestic properties should pay something, and I moved an amendment to that effect last week, which was rejected. To that extent, independent schools are no different. Like many other non-domestic properties, they benefit from local services and should contribute towards them.
However, it is notable that the bill deals with the issue in a rather clumsy way, which in my view derives from the narrow focus of the Barclay review, which asked one question that was focused on business performance, notwithstanding the fact that more than a third of non-domestic properties are not occupied by businesses. That is why OSCR was not really involved at the beginning. The review’s remit was to be cost neutral so, in order to provide the tax reductions that it suggested, it had to find money to pay for them. I put it on record that the review was not the comprehensive one that John Swinney promised about 10 years ago; it was a narrow review, and that is why we are in the current situation.
On the withdrawal of charitable relief, as a matter of principle, I do not believe that any taxpayer, whether they are paying VAT, income tax or non-domestic rates, should have to face a fourfold or fivefold increase in tax liability almost overnight. At stage 1, the minister told the committee that she had no settled view on the commencement of section 10. No decision has been made on that and the bill makes no provision for it. I do not necessarily believe that the changes brought about by section 10 should be deferred.
However, I want to talk about the impact on different schools, which Graham Simpson mentioned. The committee held a round-table event at George Watson’s college that was attended by representatives of quite a lot of independent schools. We went round the table and they were asked to provide information on the number of pupils at their schools and the cost implications of the withdrawal of the 80 per cent mandatory relief. I did a quick calculation, dividing one by the other, and it was clear that, for some smaller schools, the impact per pupil would be five, six or seven times higher than the impact would be on larger schools.
Another issue that became clear related to the fact that the tax is on the occupation of non-domestic property. We heard from the Steiner school in Edinburgh that, although it has about 250 pupils, it has a very efficient campus—basically, it is two detached villas in Morningside or somewhere—and so will have a relatively low non-domestic rates liability when the relief is withdrawn. Another school that has a similar pupil roll—I cannot remember which one, so I will not risk making an error by naming it—would have a tax liability that is three or four times higher because it has a much bigger campus and more buildings.
An issue is that we have a class of ratepayers who, for many years—certainly since mandatory relief was introduced—have not paid much attention to the efficiency with which they occupy their property, because they have no rates liability. There is therefore an argument for phasing in the change, so I would welcome the minister’s comments on that.
I agree with and will support Liz Smith’s amendment 75 and the related amendments 74 and 78.
Ministers indicated at the outset that the purpose of section 10, on the withdrawal of relief, is to provide a level playing field for the independent sector and the public sector. If one is going to provide a level playing field, one needs to do so in all circumstances; I will move on to discuss that in relation to my amendment 15 in the next group. It seems logical that nurseries that happen to be located on the campuses of independent schools should be eligible for the same rates relief, given that they are in the same class of property as nurseries that are located outside such campuses.
Annabelle Ewing
Good morning, minister. I will pick up on a few of the issues that have been raised thus far. To go back to first principles, the “Report of the Barclay Review of Non-Domestic Rates”, which was published in August 2017, recommended that mainstream independent schools should receive the same rates treatment as state schools. In December 2017, the Scottish Government indicated that it accepted the review’s recommendations, including the one to which I referred. That was two years ago, so the direction of travel should not come as a surprise to any interested party.
The committee, at paragraph 116 on page 36 of its stage 1 report, noted:
“A majority of the Committee supports section 10 of the Bill, by virtue of which mainstream independent schools will no longer be able to claim charitable relief. The Committee agrees that this change is necessary to create a ‘level playing field’ between the state and independent sectors. It will also generate more revenue for councils to spend on services for citizens.”
It went on to say:
“The majority accepts that there will be a financial impact on independent schools, but notes the Scottish Government’s view that on average the additional cost would equate to about 1.3% of annual fees.”
That is the information that the committee had to hand.
In addition, it is worth noting that, as the report states clearly, the committee received no real evidence, if any, to suggest that there were any concerns that the wish to address the lack of a level playing field between the mainstream independent sector and the state sector was motivated at all by any petty desire to get rid of independent schools. The committee’s report states that no real evidence to suggest that there was such a motivation was expressed on the part of those who had taken the time and trouble to make their submissions known to the committee. I hope that that clarifies a few myths that may have arisen.
With regard to some of the detail, Liz Smith suggested that a whole host of individuals would be seeking a place in the state sector because they could no longer afford school fees. As the minister stated, and as he will presumably comment further on today, the average increase would be approximately 1.3 per cent of annual fees, so it could amount to £20 per month or something of that order. I do not quite see that it will be likely, therefore, that there will be a huge influx from the mainstream independent sector to the state sector. I do not think that that argument stands much scrutiny.
Graham Simpson
Does Annabelle Ewing accept that we heard in evidence that some schools are already in a perilous financial position, and that bringing this provision into effect could tip them over the edge and lead to some schools closing?
Annabelle Ewing
I hear what the member says. At the end of the day, as a matter of economics, if a mainstream independent school is struggling, it will, like any other business, have to look at its model to see what it could do to go forward—or not, as the case may be. It should not be a matter of taking away money that could otherwise be spent by the state for the benefit of citizens as a whole.
I turn to the argument that, somehow, mainstream independent schools would stop taking scholarship pupils. Again, I approach that argument with a degree of caution. If that were to be the case, such schools might risk their charitable status, which would mean that they would then risk not being able to reclaim VAT. That would make a much bigger dent in their budgets than anything else that we are discussing today.
It is important to address the key issues head-on. In accordance with the way in which I voted in committee at the time of our stage 1 report, I will not support the amendment that would remove the desire to create a level playing field between the mainstream independent school sector and the state sector.
Finally, it would be helpful if the minister could clarify where the Scottish Government stands on the issue of independent day nurseries.
Sarah Boyack (Lothian) (Lab)
The amendments in this group raise a number of important issues. I support the principle of section 10, as my colleagues have done in the past, principally because it is about fair and equal treatment of our schools. However, I have questions about quite a few issues. It has been interesting to hear members’ comments thus far.
I want to focus on two issues, the first of which is to do with nurseries and the second of which concerns the timing of the introduction of non-domestic rates for private and independent schools. I will begin by picking up on Annabelle Ewing’s question. Why has the Scottish Government not applied the same criteria to private nurseries? Why has it taken a different approach to private nurseries as distinct from private nurseries that are in private or independent schools? If we want to have fair treatment, surely all those nurseries should be treated in the same way. I am interested to know what work the Scottish Government has carried out on the potential impact on those nurseries and why it has applied a different approach.
My second issue, which will probably be the big issue that we discuss, relates to the timing of the application of non-domestic rates to private schools. What consideration has the Scottish Government given to that issue? Could schools have to pay non-domestic rates from April next year without knowing what they are? If the bill goes through in early 2020, when will that effect kick in? We have two options in front of us—Graham Simpson’s softer option and Liz Smith’s slightly longer option, but I do not know when the bill, if it is enacted, will kick in. When will section 10 be commenced? Is it intended that that will be done through secondary legislation, or will the passing of the bill mean that non-domestic rates will automatically be applied to private schools?
I take Annabelle Ewing’s point that the Government’s intention in this area has been clear for quite a while, but that does not mean that schools have known exactly what the rates would be and have been able to plan for them, given that they will already have set their fees. I am interested in whether an impact assessment has been carried out on the effect of the introduction of the requirement for private schools to pay rates halfway through the school year in 2020.
There have been reports that not all schools will remain viable, and I want to develop the points that colleagues have made about the impact on state schools, focusing on the situation in Edinburgh, where 24 per cent of students go to private schools. I want to check that all those issues have been looked at properly when it comes to what the local impact would be of private schools having to pay rates. I welcome the fact that more money will go to local authorities, but I make the point that that does not automatically mean that the extra money will go to schools, given the crisis in local government funding.
I want to tease out those issues and get the minister’s views on them. The timing of the introduction of the measure and its impact on schools are important. Although we want fairer treatment for all schools, as ministers have said, we do not want there to be unintended consequences. I would like to explore those matters in a bit more depth.
Alexander Stewart (Mid Scotland and Fife) (Con)
It is vital that we get clarity from the minister on what the impact would be. Liz Smith has lodged her amendments in good faith. As we heard from the sector, the impact could be catastrophic for some schools. The sector has done some analysis of the potential impact, and we got that information when we met schools at the event that we had at George Watson’s college. As colleagues have indicated, it is anticipated that managing that impact could be a massive task for some of the small private schools.
I take on board what has been said about the effect on local authorities. The City of Edinburgh Council has been identified as one authority that will be affected, but Perth and Kinross Council will also be affected, because a large percentage of the school population in its area go to independent schools. The council could have to manage a massive knock-on effect. In addition, as we know, some schools in the area are already at breaking point, without having to take in extra pupils who previously went to private schools.
Perth and Kinross Council is planning a brand new high school that will be the first to be built in the area for 40 years, but that will take in only those pupils accounted for by the population increase, rather than those who might come as a knock-on effect of existing schools failing to survive and thrive.
That is important, but it is also vital that there is no bias or unfairness in nursery provision in the private school sector, so that such schools can compete. It would be useful if the minister could give further information on that.
09:30The Convener
Before I let the minister back in, I have a question. Is it not true that at no stage in the evidence did we get the feeling that there would be a huge influx of pupils from the independent sector to the state sector? I get the point that there might be some, but there was never any suggestion that there would be such a huge influx.
Graham Simpson
Is that a question?
The Convener
I suppose that it is more of a point. I was waiting to see whether any committee member might say, “No—wait a minute. Mr So-and-so said something.”
Annabelle Ewing
I agree with the convener on that point. I think that if we were to look back through all the evidence, that would be a fair assessment. I understand that, when a member is trying to argue in favour of an amendment, they will do their best. However, I feel that that particular argument is less compelling given the evidence that we received.
Graham Simpson
The problem is that no analysis has been done on the bill’s proposals. We can expect some pupils to go into the state sector, but the convener is right to say that we do not know the numbers.
The Convener
Okay. I will let the minister in now.
The Minister for Public Finance and Digital Economy (Kate Forbes)
Thank you very much, convener. There was a lot in that discussion. I would like to speak to the substance of the amendments and to set out the Government’s intentions. I would also like to answer that question, and I assume that members will intervene if they feel that I have not done so.
However, before I turn to the amendments, I again want to put it on the record that I recognise that not all members support the Government’s intentions in this area. As I have said before but will say again now, we recognise that the independent school sector is a well-established part of the Scottish education system that promotes choice for parents. We have no intention of using this legislation to go any further than we have already stated—it is not a cover for anything else.
Liz Smith
I think that everybody accepts that, minister. You have said that the Government has no intention of abolishing the sector, and I have listened very carefully to previous ministers who have said the same. The point is that—not least because some of it has not been worked through effectively by doing a cost benefit analysis—the bill suggests an intention to bring about significant constraints in the sector, especially for some of our smaller independent schools; we have already seen one closure and we know that there will be pressures in that area. That is where the concern lies, and nobody is saying otherwise.
Kate Forbes
I appreciate that clarification. However, I think it important that I state the Government’s intention at the outset, because there are fears that the bill represents the start of a number of actions. I wanted to state first that that is not the case, before responding to some of the concerns that have been identified.
It is also important to state, in response to Andy Wightman’s point, that there is a variety of impacts on schools. The independent school sector itself is very varied. Andy Wightman made a good point when he said that some very substantial, large schools could probably absorb such impacts better than other schools. I will go through the figures on that aspect in a minute. In the course of the past year, I have been in conversation with stakeholders and have looked at different scenarios to ensure that we avoid any unintended consequences through the legislation. However, we will come on to the substance of the points that have been identified.
The last point that I would make as an opening caveat is that independent schools already face a variety of constraints and difficulties. For example, pension impacts are just one of the many costs that they are currently trying to absorb. The bill will certainly have some form of impact, but we think that it will be minimal in comparison with others that such schools face. However, any impacts will differ according to particular schools’ sizes and resources.
Those are my caveats. As I said, I recognise that some members do not support these changes. I respect that position, but I disagree with it. We have agreed to the Barclay review recommendation that the current difference in rates treatment between independent and local authority schools should come to an end. I will go through the amendments one by one and perhaps finish with questions on the financial impact.
Amendment 73 clarifies the eligibility of charities for relief under section 4 of the Local Government (Financial Provisions etc) (Scotland) Act 1962 by suggesting that they are always eligible for relief. Section 4 of the 1962 act is already sufficiently clear that all charities can obtain relief if they meet the two tests that are set out in the section: that a property must be occupied by a charity or a trustee of a charity and that the property must be
“wholly or mainly used for charitable purposes”.
That wording already meets the intention of amendment 73, and the amendment adds nothing to what is already in the 1962 act.
Liz Smith
Prior to putting those proposals forward, what discussions did you have with OSCR? Mr Tyson made a strong comment to the committee that they open up the possibility of different levels of charity.
Kate Forbes
You are right to say that the act sets out the definition and then makes provision for exemptions. That is where the exemption to charitable relief applies.
Liz Smith
What discussions did you have with OSCR about that?
Kate Forbes
Barclay offered all stakeholders, including OSCR, the opportunity to discuss these issues.
Graham Simpson
Is it correct to say that you had no discussions with OSCR?
Kate Forbes
We accepted the Barclay recommendations, which included the offer of discussions with OSCR. It might be because of a drafting error, but amendment 73, in the name of Liz Smith, does not add anything to what is already in the act.
Amendments 74, 75 and 78 seek to allow independent nursery schools, where they are located as part of an independent primary or secondary school campus, to apply for day nursery relief. Members know that we accepted the Barclay review recommendation that we introduce day nursery relief, which would help more of the workforce to return to work. We agreed and we have moved quickly to introduce day nursery relief from 1 April 2018. That 100 per cent relief is available for a three-year period to stand-alone nurseries, whether they are in the private, public or third sectors. When it comes to accessing that relief, there is already a level playing field between the private, public and third sectors. In 2018-19, around 700 such nurseries benefited from almost £10 million of relief.
Many private and third sector nurseries are stand-alone nurseries. Those nurseries, working in partnership with local authorities, have a vital role to play in ensuring that there is sufficient childcare in place to meet the Government’s intention to expand nursery provision. We consider that the day nursery relief is correctly targeted and is benefiting those for whom it is intended.
Liz Smith
Could I ask about the specific anomaly? The proposal would give us a situation in which a nursery within an independent school, which is a charitable foundation, will have its business rates relief removed but an independent profit-making nursery will still be eligible. Where is the logic in that?
Kate Forbes
Non-domestic rates are levied on properties. Nursery relief applies to properties that are wholly or mainly nurseries. To do otherwise would not be consistent with the principles of rating whole properties. There is a big risk of unintended behavioural responses. Nursery relief already applies to properties that are wholly or mainly nurseries. If that were not the case, there would be potential for tax avoidance. Schools could create a small nursery in order to get relief on a significant part of the school. Non-domestic rates are levied on properties, and nursery relief applies to properties that are wholly or mainly nurseries, irrespective of whether they are private, public or third sector.
There are a number of advantages and efficiencies for properties that are part of a larger property, such as the sharing of resources and access. That is why it is important that nursery relief continues to apply to properties that are wholly or mainly nurseries. It is a level playing field in that it applies to public as well as private nurseries.
Andy Wightman
The minister made a distinction between properties that are and are not wholly or mainly used for nurseries in the context of nursery relief. I understand that point, but she seemed to imply that that is a general principle of rating that applies to properties across the board. That is not my understanding. Plenty of properties on the valuation roll are buildings that are apportioned between different ratepayers according to different uses.
Was the minister just making a point about nursery relief—on which I think that she is correct; that is how it is framed, whether we agree with it or not—or was she seeking to make a wider point about rating in general?
Kate Forbes
I am making two different points. One is about rating in general, which is a property relief and it is important to identify it as such. The second is about the amendment. The bill does not distinguish between private, public and third sector provision, so it does not create an unfair disadvantage for the private sector. At the moment, the relief is in place for all properties that are wholly or mainly used for nurseries, so independent private nurseries have just as much to gain from that as nurseries in the state sector. We consider that nursery relief is correctly targeted, but the key point is that all nurseries, whether they are private, public or third sector, are currently being treated equally.
Sarah Boyack
Is there a specific issue about day nurseries, which you mentioned in your opening comments on the amendments? Are you making a distinction between day nurseries and nurseries where children are resident? Was that an intentional differential? Also, can you talk a bit about tax evasion? Are you suggesting that schools should reconfigure how they use their land?
Kate Forbes
I was not intentionally making that distinction. I do not believe that there is one. The point is that nursery relief is available to all stand-alone properties.
Sarah Boyack
Your distinction is on the stand-alone issue.
Kate Forbes
Yes. No—well, yes; my consideration is that the property should be mainly or wholly used for that purpose.
Sarah Boyack
Okay.
Kate Forbes
If the nursery is part of a larger property, it is clear that the property is not mainly or wholly used for that intention.
Andy Wightman
That is clearly how the nursery relief is framed. The question is whether that is how it should be framed, rather than hiding behind the fact that that is how the relief is framed. That is not a general principle of rating. If a private enterprise such as a shop or business were to open in a larger property that otherwise qualified for charitable relief or whatever, the assessors would assess the enterprise independently. It is not a general principle of rating, so is the way in which the situation is framed for nursery relief the way that it should be framed?
Kate Forbes
I appreciate that. I am trying to make the point that it is being presented as a significant unfair disadvantage for the independent sector, primarily, but the relief makes no distinction between private, public and third sector provision. In that sense, it creates a level playing field. The difference is whether the property is wholly or mainly used for that purpose. My understanding is that the relief that is being suggested could be accessed only by nurseries in the private school sector that are not mainly or wholly used as nurseries, without any thought being given to the fact that non-stand-alone nurseries in the public sector will not be able to apply for that relief. It would create unfairness where unfairness does not currently exist.
On additional support needs, we recognise that good work is undertaken in both independent and public sector schools to educate children with a range of differing needs. Placing a child with additional support needs in a mainstream school may not suit the child’s ability or aptitude and it may negatively impact on the learning of other children in the school. For a number of children, that means that their needs are best met through attending an independent specialist school. Such schools cater solely for children with specific or complex additional support needs as a result of severe behavioural problems, learning difficulties or physical or sensory disabilities.
09:45As members know, the bill retains relief for those special schools. Amendments 76 and 77 would retain relief for independent schools that provide any additional support, without a requirement that that is the whole or main purpose of the school. My hope is that all independent schools provide some form of support for the children in their schools who have additional support needs. Therefore, the amendments would undermine the Barclay review’s recommendation to address fairness. As such, I cannot support them.
Amendments 80 to 83 relate to the timing of the commencement of section 10. Section 30 sets out the Government’s position on commencement of the bill’s provisions. The Barclay review implementation plan was published in December 2017, and we made it clear that we would deliver the change by 2020 to
“allow time for those schools affected to plan ahead.”
The independent schools provisions are not currently identified for early commencement, but I confirm that it is the Government’s intention to commence those provisions from 1 September 2020, subject to the committee’s decisions and votes, of course.
A commencement date of September 2020 would be almost three years after the change was first recommended by the Barclay review, and it would tie introduction to the start of the academic year rather than to the start of the financial year, which should help schools with their planning for academic year 2020-21.
We have always been clear that we will deliver that change, as recommended by the Barclay review. I hope that that confirmation of the Government’s commencement intentions will assist the sector in its planning.
Andy Wightman
Would the mandatory relief be withdrawn from 1 September 2020 and rates be payable from that date?
Kate Forbes
Indeed. As I said, it is almost three years since we published the Barclay implementation plan, which stated that the change would come into effect in April 2020. We added on some months in the hope that that would give schools the additional time to make their plans.
To address members’ questions—I might well have forgotten some of them—I return to the point that I made at the outset. Notwithstanding the fact that some members fundamentally disagree ideologically with the Government’s intentions, I maintain that the financial impact of the provision will be minimal.
Committee members have picked up on two areas: the impact on independent schools and the impact on the state sector. Scottish state schools had an average spare working capacity of 30 per cent in 2018. In considering the cost implications, we should be looking at the marginal cost. In a majority of cases, the marginal cost of a pupil moving from the independent sector to the state sector is zero. Even if 3 per cent of pupils were to transfer, we do not accept the suggestion that that would leave the policy revenue neutral.
Graham Simpson
That is a Scotland-wide figure. Have you done analysis in places such as Edinburgh and Perth and Kinross?
Kate Forbes
In places such as Edinburgh and Perth and Kinross in particular, a number of pupils are unlikely to go to a school in the same local authority area in which they live. For example, a number of pupils in independent schools in Perth and Kinross do not necessarily live there. Therefore, the impact would probably be distributed on a Scotland-wide basis—or the impact on the state would certainly be in the area in which they live and not in the area where they currently go to school. The Scotland-wide figure is therefore more important when looking at the impact in the round.
Graham Simpson
It sounds as though you have not done any analysis and that you are assuming things. Have you asked the sector where the independent school pupils are from and where they live?
Kate Forbes
The figures are informed by the Convention of Scottish Local Authorities. They are COSLA’s figures on what it perceives the impact on local authority areas would be. As you know, COSLA represents all local authorities, and the figures are informed by a Scotland-wide perspective on what the impact on local authorities would be.
On the magnitude of the change for schools, I do not dispute that there will be a more significant impact on some smaller schools than on larger schools, as Andy Wightman said. That is why we have looked at the average impact. The impact of our proposals is equivalent to 1.3 per cent of the current average fees, which is a small increase compared with the average yearly fee increase of 4 per cent. I accept that those are averages, but it is important that we use averages because we need to look at the general impact. I find it difficult to accept that a change of that magnitude will be sufficient to lead to a mass exodus of pupils.
Aside from all that, our intention is to accept the Barclay review recommendation that we remove the unfairness that exists between public and private schools. I accept and will continue to accept that not all members share the Government’s intention. However, that is the current progress that we are making in the area, and that is why I do not accept Liz Smith’s amendments.
The Convener
Thank you, minister. I ask Liz Smith to wind up.
Liz Smith
I thank the minister and members for their contributions to the debate. I will begin with some general comments. I fully accept what the minister said when she replied to my intervention. This is not about trying to close down the independent sector. I understand that. The independent sector has a proud record of considerable educational advantage in the results that it delivers, not just to people who are able to afford the fees, but also in relation to the public benefit that independent schools provide to their local communities.
Back in 2005, when the Parliament debated whether the independent sector should have charitable status, there was considerable financial discussion about what the public benefit was, and all parties, including some that had dissented in the first instance, agreed that there should not be an attack on the sector. The problem that we have with the current proposals is that, perhaps as an unintended consequence, that is exactly what will happen. We know that some of the very small schools are really struggling at present, and that is not just because of pension changes; it is also because of the proposals, which will—
Kate Forbes
Will the member take an intervention?
Liz Smith
Of course.
Kate Forbes
Does the member accept that the changes have not been implemented yet? If schools are, as she said, considering their business models, for want of a better phrase, it is clear that the independent sector is facing bigger challenges than the marginal changes that we are discussing.
Liz Smith
The independent sector, through the Scottish Council of Independent Schools, has provided you with substantial arithmetical calculations on the implications. That has come through some regional applications as well—in Perth and Kinross, Edinburgh, Glasgow or wherever it might be, schools have undertaken substantial analysis of the implications. I am sorry to say that I do not believe that the Scottish Government has undertaken the same comprehensive analysis. The stage 1 debate proved that. The financial memorandum on the bill is weak.
Nobody is arguing that there should be a circumstance in which the independent sector has special privileges when it comes to finances. That would be completely wrong. What the sector is asking for is that, if evidence is provided for the legislative changes, it should be convincing and based on the facts. Such evidence has not yet been provided.
I will take up a point that Annabelle Ewing rightly raised. I do not believe that there will be a mass exodus of pupils, but there will be some pupils whose parents can no longer afford education in the independent sector and, from a small-school perspective, that can make the difference between a school being able to continue or not.
The minister mentioned that schools have had three years to think about the Scottish Government’s proposed changes, but during that time they have not had to hand the facts about the implications of the proposals and what they would actually mean for the sector.
Annabelle Ewing
I would bear in mind the following point. If I were on the board of a mainstream independent school, I would have started to investigate—indeed, it would be a dereliction of duty not to do so—what the situation would look like once the relief had been removed. The board would have to make plans with regard to future fee increases and all the rest of it. I find it very hard to believe, as a practical matter, that schools have not already started to look at the issue in detail.
Liz Smith
All the independent schools—their boards, heads and bursars—have been looking at the issue for a very long period of time. The problem is that the facts that they need from the Scottish Government on which to base their analysis are not there, or at least the information is not complete.
Annabelle Ewing
What facts? The facts are that, if a school is going to lose relief and pay rates, it can look at the rating law that applies to buildings of a similar size and so on. That is self-evident. I do not see what possible lack of facts Liz Smith could be referring to in respect of a school trying to ascertain, in a broad-brush way, what the rates will look like come the entry into force—I hope—of the bill.
Liz Smith
The bill has implications for whether schools will continue—or will not continue, not least based on what Martin Tyson said in his evidence to the committee—to be able to provide public benefit, but there are circumstances that are as yet not clear to the independent sector. That is the problem that the sector has.
Andy Wightman, in his very good comments on nursery provision, was absolutely right—my amendment 75 also differentiates between partial and whole use—that the proposed legislation raises issues other than just the wish for a level playing field, which is so important for its delivery. He made a strong point on that.
The minister is keen to promote what COSLA says, but that is only one part of the story.
Kate Forbes
I am not “keen to promote” what anybody is saying. I was merely answering the question about where the figures came from in order to emphasise that we are not plucking figures from the sky. COSLA, whose members deliver education, has identified the potential impact on the state sector.
Liz Smith
That is one issue. The other issue is what the real impact will be in terms of public benefit. I think that independent schools will want to continue to provide public benefit and to supply bursary support, the provision of which has increased considerably—rightly so, in my opinion—since the Charities and Trustee Investment (Scotland) Act 2005 came into force. We should not forget that some independent schools failed the charity test that was set out in the 2005 act—again, rightly so—and therefore had to up their game.
It is a great pity that the bill will undermine all the good work that has been done to ensure that those schools are more accessible. In many cases, youngsters would not be able to attend school in the independent sector unless they had a bursary. The bill undermines that principle. Given the Scottish Government’s very strong record in promoting equity and excellence in schools, I do not understand how the legislation before us meets that criteria. There is no doubt in my mind that it will make the sector more elitist, which is exactly what we do not want, and exactly what the independent sector has been fighting against for a very long time. I do not get where the legislation is coming from at all. It is a regressive step and, as I said, it undermines all the good work that the Parliament carried out unanimously in 2005. I will leave it there.
The Convener
Thank you. Are you going to press or withdraw amendment 73?
Liz Smith
I will press my amendment.
The Convener
I suspected that you might. The question is, that amendment 73 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 2, Against 4, Abstentions 0.
Amendment 73 disagreed to.
The Convener
Amendment 15, in the name of Andy Wightman, is in a group on its own.
10:00Andy Wightman
As we have just discussed, section 10 provides for withdrawal of charitable relief from independent schools. At an early stage, there was, in response to the Barclay review recommendation on that, some debate about specialist schools in the independent sector. The bill reflects that conversation and will implement the Government’s decision to exempt them from withdrawal of charitable relief—in other words, to retain the status quo for them. There is an exemption for schools that provide education for pupils who
“are selected on the basis of musical ability or potential”.
My amendment 15 simply seeks to apply the principle that the minister has outlined on a number of occasions. Earlier today, she said again that the current difference between the independent sector and the public sector should end.
I think that only one school in the independent sector provides education for pupils who are selected on the basis of musical ability, but there are four public schools—or parts of them—that would have to be valued separately if my amendment were to be agreed to. They provide exactly the same services, and the minister is well aware of them. They are the national centres of excellence in music at Douglas academy in East Dunbartonshire, the City of Edinburgh music school at Broughton high school in Edinburgh and Aberdeen City music school at Dyce academy in Aberdeen, and the national centre of excellence in traditional music at Plockton high school, which the minister will no doubt be very familiar with.
My amendment merely seeks to extend the status quo in relation to relief from rates—not charitable relief, because public schools do not, of course, receive charitable relief—to specialist music schools that are in the public sector.
I move amendment 15.
Graham Simpson
Amendment 15 seems to be very fair. The committee was quite critical of the section of the bill that gives only specialist music schools rates relief. I recall that there was discussion about why schools that specialise in other areas, such as science or sport, would not receive that and why it should be left as just music schools. However, we are where we are, and the provisions are in the bill. It seems to me that, if they are to survive in the bill, what Andy Wightman has suggested is entirely fair. If the relief applies in the independent sector, why does it not also apply in the public or state sector?
Annabelle Ewing
Will the member take a brief intervention?
Graham Simpson
I have just finished, but feel free to carry on.
Annabelle Ewing
It is okay. I will come in later.
The Convener
I will let Sarah Boyack come in, after which Annabelle Ewing can make the point that she was going to make.
Sarah Boyack
She will probably intervene on me.
I would like to explore the issues in Andy Wightman’s amendment relating to state schools that specialise in music as centres of excellence getting the same treatment that St Mary’s music school gets. Because of Scottish National Party cuts, access to music in our schools has been increasingly under threat. All our schools should provide music tuition and access to teaching that supports students who want to excel in music or access music tuition and not have to pay for it. Music tuition is a really important building block for personal development, expression, confidence, health and valuable life skills.
I get the fact that local authorities face budget cuts and that instrumental music tuition in particular is feeling the pinch. In the most recent academic year, there was a sharp increase in fees for instrumental music tuition. Some 38 per cent of local authorities increased tuition fees, and that meant a decline in the number of students studying music in our state schools.
That is part of the context. It takes us to the question why the bill ignores the four state schools that are centres of excellence and have not just prioritised music teaching, which we would hope for in every school, but have invested heavily in it.
The four schools that Andy Wightman mentioned do not benefit in the way that St Mary’s music school does. That is not to argue against St Mary’s music school; I understand that 70 per cent of the school’s funding comes directly from the Scottish Government. The issue is more to do with fairness in how the Scottish Government deals with music specialisms in schools. Surely the other schools are worthy of support, in acknowledgement of the substantial additional investment that is required to provide their music and teaching infrastructure. I am not arguing that other state schools should not make such investment. As I said, all schools should do that.
All state schools pay non-domestic rates, but not all that income goes back to schools, given the huge pressures. If the bill passes, I hope that extra resources will go to local authorities to enable them to prioritise music. However, that does not address the issue at the heart of amendment 15, which is equal treatment between the state and private sector.
Annabelle Ewing
In paragraph 117 of our stage 1 report on the bill, the committee said:
“We are not persuaded that the case for treating independent specialist music schools (in practice, one school at present) any differently from any other independent schools has been clearly made. There are a number of independent and state schools that could be said to make a distinctive contribution to musical culture or in other areas, such as Scotland’s National Centres for Excellence.”
Amendment 15 seems to muddy the waters, rather than make the position clearer, and on that basis alone I cannot support it. As a matter of principle, I do not think that it helps us with consistency to any particular degree.
What is the cost of the status quo of the bill compared with the cost implications of the approach that Mr Wightman has proposed? I am looking at Mr Wightman to see whether he knows the cost of his approach, but he is not paying attention—I do not know whether that means that he does not know. Maybe the minister knows. Maybe someone knows what the cost implications of amendment 15 are.
Alexander Stewart
Amendment 15 has merit in that it would equalise things and give the same opportunities to the state schools that have expertise. As members said, councils are suffering. In the Clackmannanshire Council area, in my region, there has been a 60 per cent reduction in music tuition because of the fees that have been introduced, which is disadvantaging masses of individuals in the community who in the past would have had the opportunity to unlock their potential.
There should be more discussion to see whether what is proposed can be done, because I think that it would equalise things in the sectors and support the schools that we are talking about.
Liz Smith
Amendment 15 is important, because in lodging it Mr Wightman has identified that there are many different types of school in Scotland, in the state sector and in the independent sector. That perhaps reflects what I would describe as “exceptional circumstances” rather than just “special schools”, which is the legal term that we are used to using. Amendment 15 reflects that difference. It might need to be refined before stage 3, but it deals with the anomaly that would occur if we allowed for differences in the independent sector without recognising that there are considerable differences in the state sector, too.
As I said to the minister, both sectors should be all about choice and excellence. There is no doubt that the schools to which Mr Wightman referred are excellent schools. Amendment 15 is therefore an important amendment.
The Convener
As Annabelle Ewing said, at stage 1, the committee made it clear that we did not support a proposal that would affect just one school. Andy Wightman had every right to lodge amendment 15, but if the committee agrees to it, we will be saying, “We disagreed with the approach at stage 1 but now agree with it at stage 2, as long as we add these four public schools but not the centres of excellence in other subjects.” We would be giving music a more important place than other subjects in the curriculum, in relation to rates relief. That would make what we said in our stage 1 report look a bit strange.
Kate Forbes
I recognise that the committee was not persuaded by the case for treating independent specialist music schools differently, although I think that amendment 15 helps to highlight what a unique school St Mary’s music school is. I will go through a number of comments on the amendment, which I believe is well intentioned.
The amendment, which seeks to broaden eligibility to include public schools that
“are wholly or mainly used for the purpose of developing musical excellence”,
rightly recognises that schools have much to be proud of in promoting excellence across various subjects including sport, art and music. I recall that, previously, Kenneth Gibson called for a specialist school for football, having seen Scotland lose the night before.
Although there are schools that offer specialised provision, they nearly always do so as part of a mainstream curriculum and they rightly offer the benefits of that provision to other pupils who attend the school. For example, few of the pupils who attend the schools that have been identified, including Plockton high school and Douglas academy, do so solely because of their musical aptitude, although of course some do. Conversely, every pupil attending St Mary’s does so purely on the basis of their musical ability and as such the school offers a unique national service, which is why it merits a unique policy solution.
I do not think that any school would currently meet the criteria that are set out in amendment 15. Schools such as Plockton and Broughton high schools do not select pupils on the basis of musical ability alone, nor are they, to use a favourite phrase from this morning,
“wholly or mainly used for the purpose of developing musical excellence”.
Lastly, as Sarah Boyack identified, the impact would be on the local authorities, not on the schools themselves. The local authorities would decide whether—
Sarah Boyack
The minister was making the point that it is important to have one school of excellence. If we look at the income background of students attending St Mary’s, we see that the number who come from the lowest-income backgrounds is declining. Surely there are real issues about access and fairness here? We have got four schools in the state sector that specialise in different parts of the country—albeit that one of them is Broughton high school—which exposes the challenging issue that students from low-income backgrounds are not getting access to music in state schools, and nor are they getting access to St Mary’s. We have four schools that are more accessible for students in different parts of the country, yet they are not getting the same treatment as that which you are proposing in the bill for St Mary’s.
Kate Forbes
That is a fair point. The intention of amendment 15 is laudable, but the amendment would not realise that intention because—unlike St Mary’s—none of those schools is used “wholly or mainly” for the purpose of music tuition and students are not selected on the basis of aptitude. There may be a very strong argument for looking at what more we can do to ensure that St Mary’s is more accessible and supporting music tuition across the state sector. However, the point here is that the local authorities in whose areas each of the four schools is situated would get a tax benefit and it would be up to the local authorities to decide whether that benefit is passed on—we cannot mandate them to do so.
Let us assume for a moment that only those four schools—those four local authorities—would get the financial benefit, and not every local authority that is providing music tuition. I understand that the cost of giving the relief to St Mary’s would be approximately £30,000, but if the four schools that have been identified were eligible—and there are big questions marks around that—the cost would be approximately £900,000 per annum. The £900,000 would go to the four local authorities, whereas the cost for St Mary’s is £30,000. That is a significant leap in cost.
10:15Andy Wightman
I thank members for the various points that they have made, all of which I will try to deal with.
The convener referred to our stage 1 report. Of course, there is a case for extending eligibility for rates relief to other schools and national centres of excellence, and the convener is perfectly entitled to lodge amendments to that effect. I am merely focusing on specialist music schools, which are mentioned in the bill.
I turn to the minister’s comments. I do not know what the selection criteria are at Plockton, but I know that the City of Edinburgh music school selects pupils on the basis of musical ability or potential. There are 50 or 60 pupils there, who are not just at Broughton high school; Flora Stevenson primary school is part of the school, too.
With regard to the “wholly or mainly” provision, we are talking about lands and heritages that are occupied by a public school that selects pupils on the basis of musical ability or potential and which
“are wholly or mainly used for the purpose of developing musical excellence”.
Such schools have designated areas; they are premises.
Turning to Annabelle Ewing’s question about the costs—and the minister’s claim, about which I am intrigued—we could not identify the costs until we undertake a valuation. At the moment, each of the four schools in question is valued as one whole school. For example, Broughton high school has a rateable value of £803,000, as of April 2017. If amendment 15 were agreed to, the Lothian assessor would have to go there to reassess the school and apportion a value to that bit of it that provides the specialist music school.
Kate Forbes
The costing that I identified is of the relief that would be applied if the whole school were to be exempt.
I accept that some pupils are selected on the basis of musical ability or potential, but subsection (2)(a)(ii) of the new section that amendment 15 seeks to insert specifically says:
“follows a curriculum which includes classes aimed at developing musical excellence, and
are wholly or mainly used for the purpose of developing musical excellence”.
My point was that although some pupils might be selected on the basis of musical ability or potential and some classes might be focused primarily on musical excellence, I find it difficult to believe that all four schools are used “wholly or mainly” for that musical purpose, in the light of the fact that they are also local authority schools that have a catchment area.
Andy Wightman
That is the case—they are not wholly or mainly used for that purpose, but that portion of the lands and heritages that are used by the music schools are used wholly or mainly for that purpose. That takes us back to the argument about the nursery schools. I have just had a look at the Scottish Assessors Association’s practice note on day nurseries. It says:
“Day Nurseries adjacent to or within the grounds of school properties or forming part of the school property and providing the pre-school education for the associated school may be valued in terms of SAA Public Buildings Committee Practice Note 5.”
That is routine—
Kate Forbes
My point is that amendment 15 does not provide for any apportionment. Secondly, it is a lot easier to apportion different values to residential and non-residential parts of bed and breakfasts, for example. You are implying that we can apportion a value to a centre of excellence relative to the value of the rest of the school. That is very difficult to conceive of when many of the areas of that centre are common with the rest of the school.
Andy Wightman
The bill makes no provision on the process of valuation, which is undertaken by professional valuers independently. Valuers are well used to apportioning values in complex properties. Typically, they will apportion the value of common areas in proportion to the amount of use that that particular use takes of the whole building. That is not difficult for valuers to do, and it would be inappropriate for me to make any reference to how valuations should be carried out, because that is left entirely up to independent assessors.
If there are some drafting issues to do with the use of the phrase “wholly or mainly”, I would be happy to deal with them, but amendment 15 is predicated on the notion that we have a well-established valuation process that already apportions values to parts of buildings that are used for different purposes, for example as cafes or shops.
Sarah Boyack talked about the more general question of musical education, and I accept all her points entirely. As a non-domestic rates bill, the bill is about the liability of properties for rates. In so far as music is being referred to, we are talking about properties that are used exclusively for specialist music schools, whether those schools are public or private.
I repeat that we could have further amendments in this area at stage 3. I am just seeking to apply some consistency in relation to the principle that has been established at the beginning of the process, which is that there should be parity between independent schools and public schools. The logic of that is that there should be a level playing field.
That was followed by a proposal by the Government, which is incorporated in the bill, that there should be certain exemptions. My amendment follows on from one part of that and sets out that there should be a level playing field for those exemptions.
The Convener
Are you pressing amendment 15?
Andy Wightman
Yes.
The Convener
The question is, that amendment 15 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
The Convener
The result of the division is: For 4, Against 2, Abstentions 0.
Amendment 15 agreed to.
Section 10—Charitable relief: independent schools
Amendment 74 moved—[Liz Smith].
The Convener
The question is, that amendment 74 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
The Convener
The result of the division is: For 3, Against 3, Abstentions 0.
As convener, I have a casting vote. Given that the member who is missing is likely to have voted along these lines, I will use it to vote against amendment 74.
Amendment 74 disagreed to.
Amendment 75 moved—[Liz Smith].
The Convener
The question is, that amendment 75 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
The Convener
The result of the division is: For 3, Against 3, Abstentions 0.
Once again, I will use my casting vote to oppose the amendment.
Amendment 75 disagreed to.
Amendment 76 moved—[Liz Smith].
The Convener
The question is, that amendment 76 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 2, Against 4, Abstentions 0.
Amendment 76 disagreed to.
Amendment 77 not moved.
Amendment 78 moved—[Liz Smith].
The Convener
The question is, that amendment 78 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
The Convener
The result of the division is: For 3, Against 3, Abstentions 0.
I will use my casting vote to vote against amendment 78.
Amendment 78 disagreed to.
Amendment 79 moved—[Liz Smith].
The Convener
The question is, that amendment 79 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 2, Against 4, Abstentions 0.
Amendment 79 disagreed to.
Section 10 agreed to.
The Convener
We will have a short break.
10:23 Meeting suspended.10:28 On resuming—
After section 10
The Convener
Amendment 93, in the name of Sarah Boyack, is in a group on its own.
Sarah Boyack
I lodged amendment 93 in order to raise the issue of why councils pursue arm’s-length external organisations. It was suggested in the Barclay review that it was for tax avoidance, but is worth pointing out the immense pressure that local authorities are under, and that there are many benefits that come from arm’s-length sports and cultural organisations that local authorities have set up specifically to enable communities to access facilities that they would not otherwise be able to afford.
I am not an enthusiast for outsourcing. I would far prefer councils to be able to run their own in-house services, but we should not forget that although ALEOs are not providing core services such as education and social care, and so investment in them is not ring fenced, they nonetheless have huge importance as a result of the health and wellbeing benefits they bring, particularly in the areas of sports and culture. Amendment 93 is a reaction against the term “tax avoidance” in the Barclay review, because I think that our public sector local authorities are acting under legitimate pressures and with the best intentions in trying to provide valuable and affordable services to our constituents. The issue is the funding deal that local authorities get from the Scottish Government. That is why I lodged the amendment and I am interested to hear colleagues’ comments.
I move amendment 93.
10:30Andy Wightman
I broadly agree with the intention of the amendment, but I note that it says,
“Any reduction or remission of rates ... should not be offset by a reduction in annual central government grants to that authority”.
That gets us into the field of local government finance, and I wonder about the competence of the amendment in that sense. Given that the existing funding formula for local government takes account of non-domestic rates revenue, I do not think that it is obvious that, were this amendment to pass, there would be an automatic impact on the local government settlement. It would be difficult to introduce a financial mechanism to the annual settlement through an amendment to this bill, so I am keen to hear what the minister has to say.
Kate Forbes
There is widespread acknowledgement that ALEOs are often established for financial reasons—to avoid non-domestic rates. I agree with the committee’s stage 1 report, that
“Tax avoidance corrodes public confidence in the tax system”.
Amendment 93 would further facilitate that by removing the financial disincentive for councils considering adopting or expanding ALEOs. Perhaps it would be helpful if I were to set out the Scottish Government’s position. We partly rejected the Barclay review recommendation that ALEOs should lose eligibility for charitable relief in order to protect public services that are already being delivered through that route across the country. As such, existing ALEOs will continue to receive the levels of charity relief support that they received at the time of the announcement, adjusted for inflation and the impact of future revaluations.
No existing ALEOs will be worse off as a result of the decision, but in the spirit of my initial comments around tax avoidance, and in order to prevent further proliferation of ALEOs, where a new ALEO is established, or an existing ALEO is expanded, we will claw back any increased cost of relief. Councils can still create or expand existing ALEOs where it makes policy sense to do so, but the Scottish Government will not facilitate tax avoidance by allowing them to retain the financial benefits.
I hope that that explanation is helpful. I do not think that it answers Andy Wightman’s question, which he may want to repeat. He does not. In that case, I hope that Ms Boyack will consider carefully whether to press her amendment and I encourage the committee not to accept it, for the reasons that I have given.
Sarah Boyack
I will not press the amendment at this stage, but I remain convinced that ALEOs have not been established just for tax avoidance purposes. I know several local authorities that have established them for very good principles.
Amendment 93, by agreement, withdrawn.
Section 11—Power to reduce or remit rates for certain organisations: guidance
The Convener
Amendment 94, in the name of Sarah Boyack, is grouped with amendments 95, 40 and 41.
Sarah Boyack
I lodged amendment 94 because I thought it important that guidance is laid before the Scottish Parliament and that we get sufficient time for proper scrutiny, because these are important issues. It has been said before that we very rarely discuss non-domestic rates legislation, and this is a generational opportunity, so I want to make sure that we get proper updates following this bill. I have read the alternative proposals by the Scottish Government and, to me, they do not make that commitment. They do not go as far as my amendments, which are important for the purposes of accountability and transparency. I hope that colleagues will support them.
I move amendment 94.
Kate Forbes
I shall start with Sarah Boyack’s amendments. We carefully considered what the Delegated Powers and Law Reform Committee’s stage 1 report had to say on the section 11 powers, which enable the Scottish Government to issue guidance to rating authorities about their discretion to grant rates relief to sports clubs. We consider that it is really important that those who need to have regard to the guidance, and those who may currently be in receipt of this discretionary rates relief, should be involved in the drafting of the guidance.
The guidance will be more about the dissemination of good local authority practice than about central Government seeking to direct what local authorities do. To that end, a working group has been set up to progress the drafting of the guidance and work will get under way shortly. The working group comprises representatives from the Office of the Scottish Charity Regulator, the Institute of Revenues, Rating and Valuation, sportscotland, the Scottish Sports Association, local authority revenue staff, Community Leisure UK—Scotland, and VOCAL, the voice of chief officers of cultural and leisure services in Scotland. However, if the committee would find it helpful, I would be very happy to undertake to seek the committee’s comments on the draft guidance produced by the working group. That is my response to amendments 94 and 95.
Andy Wightman
I understand all that. On a broader point, section 4 of the 1962 act is entitled
“Reduction and remission of rates payable by charitable and other organisations”.
One of my concerns—and that of other committee members, I think—about the Barclay review was that it was very narrowly focused. Charitable relief then came up as an issue in relation to one particular type of property that enjoyed such relief, that is to say, independent schools. However, when we visited Kilmarnock we heard that a profitable business in the high street—a furniture shop—had closed down because of a charitable shop nearby that sold furniture; it did not, however, pay its staff, as they were volunteers. That highlights the fact that the independent schools amendment, which we have dealt with, is about only one bit of the charitable sector. We have anecdotal evidence that charitable relief is having a serious impact on the viability of businesses. Is there not a case for a wider review of how charitable relief is applied?
Kate Forbes
That is a very fair comment. Although it is a separate issue from those relating to the amendments in this group, I would not dispute the need perhaps to have a broader look at how charitable relief is applied across the board. In a sense, charitable relief is similar to the small business bonus scheme. In other words, this is about identifying whether the policy is achieving its purposes or whether it is undermining the rest of the local economy.
The amendments essentially address the issue of whether Parliament should determine the guidance or whether it should be informed by the stakeholders that I have identified. I will leave it to the committee to tell me whether it would be keen to comment on the draft guidance.
My amendments 40 and 41 require that, as soon as it is reasonably practical after producing guidance to local authorities, the Scottish ministers will lay a copy of that guidance before Parliament and publish it. That will ensure that the committee, if it sees the need, can consider what the guidance says. For that reason—because Parliament will have an opportunity to comment—I do not see the need arising for Parliament to annul the guidance. I therefore do not support amendments 94 and 95, and I hope that committee members will support my amendments 40 and 41.
Annabelle Ewing
I welcome the minister’s helpful suggestion that she will seek to involve the committee by inviting it to comment on any draft guidance.
Mr Wightman called for a review of charitable relief in general. Last week, Mr Wightman lodged an amendment to, in effect, lock in a position on the national relief of the small business bonus scheme. The minister said that the scheme is subject to review, and we do not yet know the outcome of that. Mr Wightman’s amendment last week was supported by others, although not by me and my colleagues in the Scottish National Party. I find his position a bit inconsistent. On the one hand, Mr Wightman wants a review of something. On the other hand, he would lock in a position—notwithstanding that there is a review—to take away the national relief of the small business bonus scheme. That is a bit inconsistent.
The Convener
Can we return to the issue in front of us, please? If no one else wishes to comment, I ask Sarah Boyack to wind up, and to press or seek to withdraw amendment 94.
Sarah Boyack
I am minded to press amendment 94 and to move amendment 95. We need more parliamentary scrutiny, notwithstanding the minister’s comments about the working group. When we are passing complicated legislation, there is an issue about the amount of time that everyone has to deal with it. We need to ensure that all those who pay the tax and those it impacts are involved in that wider discussion. We need that accountability. I welcome the fact that we have a choice of amendments, which have different strengths. I prefer amendments 94 and 95 in my name to those in the minister’s name.
The Convener
The question is, that amendment 94 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
The Convener
The result of the division is: For 4, Against 2, Abstentions 0.
Amendment 94 agreed to.
Amendment 95 moved—[Sarah Boyack].
The Convener
The question is, that amendment 95 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
The Convener
The result of the division is: For 4, Against 2, Abstentions 0.
Amendment 95 agreed to.
Amendment 40 moved—[Kate Forbes].
The Convener
The question is, that amendment 40 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Against
Boyack, Sarah (Lothian) (Lab)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 2, Against 4, Abstentions 0.
Amendment 40 disagreed to.
Amendment 41 moved—[Kate Forbes].
The Convener
The question is, that amendment 41 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Against
Boyack, Sarah (Lothian) (Lab)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 2, Against 4, Abstentions 0.
Amendment 41 disagreed to.
Section 11, as amended, agreed to.
After section 11
The Convener
Amendment 42, in the name of the minister, is grouped with amendment 43.
Kate Forbes
At the time of this year’s Scottish budget, the Scottish Government committed to devolving empty property relief in time for the next revaluation. Amendment 42 delivers that by repealing legislation that provides that no rates will be payable on unoccupied lands and heritages. It also repeals a power that allows ministers to prescribe by regulation classes of unoccupied lands and heritage for which such rates are payable.
Although amendment 42 is simple, the implications are significant, both for national non-domestic rates policy and for local empowerment. When the relief is repealed, local authorities will benefit from the cost of empty property relief to the Scottish Government, as they will see an equivalent increase in their revenue funding. The nature of that transfer will be discussed with COSLA nearer the 2022 revaluation, as it is intended that the repeal will have effect from 1 April 2022.
Councils will have full flexibility over how they deploy those extra resources locally. Should they wish to replicate the former national relief, or to introduce any local relief, they have the option to do so using the powers given to them by the Community Empowerment (Scotland) Act 2015. Should they wish to use the resources to support other local priorities, then that is a matter for individual councils, which are accountable to their local electorate.
The reform, along with others agreed in the 2019-20 budget, represents the biggest empowerment of local authorities since devolution—that point might have been more accurate if I had said it last week; until last week, it was the biggest empowerment of local authorities since devolution. I hope that the committee can support amendment 42.
Amendment 43 is a technical amendment: it amends section 12 of the bill to accommodate the changes made by amendment 42.
I move amendment 42.
Sarah Boyack
I support the principle of the proposal in amendment 42, because it is important that rates are paid on unoccupied land. The proposal sits alongside the possibility that local authorities can still grant relief using powers under the Community Empowerment (Scotland) Act 2015. I note that COSLA has welcomed those powers in line with its aspirations for increased local fiscal empowerment.
However, there is a raft of powers that local authorities need in order to tackle the issue of unoccupied and underutilised land if we are going to see land being used for the benefit of all our communities and to enable wider economic success. One of the financial challenges that councils currently face is investing in regeneration and using compulsory purchase orders, as well as how they prioritise that in relation to other challenges.
It is important to have compulsory sale order powers as part of that range and it needs to be an option that sits alongside amendment 42 and the powers in the Community Empowerment (Scotland) Act 2015. It would be good to have an update from the minister on when she sees such a provision being in place, because I think that the powers would complement each another.
10:45Andy Wightman
I thank the minister for lodging amendments 42 and 43, which form part of a commitment that was made in budget negotiations between the Scottish Greens and the Scottish Government in January this year to devolve non-domestic empty property relief to local authorities. I welcome the amendments and will support them.
Kate Forbes
I note Sarah Boyack’s points. Perhaps it would be easier if I come back to her on them later.
Amendment 42 agreed to.
Section 12—Non-use or underuse of lands and heritages: notification
Amendment 43 moved—[Kate Forbes]—and agreed to.
Section 12, as amended, agreed to.
Section 13—Failure to pay instalments
The Convener
Amendment 44, in the name of Kate Forbes, is grouped with amendments 45 to 49.
Kate Forbes
Section 13 makes changes to the way in which local authorities can recover unpaid non-domestic rates. It aims to bring the enforcement position for non-domestic rates broadly into line with the enforcement position that currently exists under council tax.
The group of minor amendments that are before the committee today flow from discussions with local authority colleagues following the bill’s introduction and they fine tune section 13 of the bill rather than make substantive changes.
Amendment 44 removes the reference to a “demand note”, which may not cover a whole year and which is not essential to the operation of new section 8A(1) of the Local Government (Scotland) Act 1975. Instead, what matters is that the ratepayer has a liability to the local authority and has failed to pay an instalment of that liability.
Amendment 45 recognises that a ratepayer may be liable for the rates for part of the year only, because they occupy the property only for part of a year.
Amendments 47 and 48 amend subsections (4) and (5) respectively of new section 8A to make it clear that, following a default, the ratepayer becomes liable for payment in full of the rates for which they are liable, which may be less than the full rates for the year.
Amendment 46 is a consequential amendment that flows from amendment 44, and amendment 49 is a consequential amendment that flows from amendments 47 and 48.
We are keen to ensure that, as far as is practical, the legislation enables local authorities to administer the non-domestic rates system in a flexible, efficient and effective manner. The amendments in this group deliver on that.
I move amendment 44.
Amendment 44 agreed to.
Amendments 45 to 49 moved—[Kate Forbes]—and agreed to.
Section 13, as amended, agreed to.
After section 13
The Convener
Amendment 50, in the name of Kate Forbes, is grouped with amendment 51.
Kate Forbes
Amendments 50 and 51 reflect the aspirations of the committee and my responsibilities as minister for digital economy, as discussed during stage 1 evidence sessions, to improve the use of digital and electronic systems in the administration of the rates system. In its final report, the Barclay implementation appeals sub-group also supported the move to a paperless interaction between the assessor and the proprietor, tenant and occupier. The amendments ensure that ministers are able, by regulations, to specify the way in which all notices in the context of non-domestic rates are communicated between parties.
Amendment 50 provides powers for ministers to make regulations to allow or require assessors, local authorities, ratepayers and any other statutorily involved party to issue notices by “electronic means”. Such notifications are currently provided in postal form, and I hope that the committee agrees that it is important that we move forward.
Amendment 51 specifies that those regulations are subject to the affirmative procedure and that ministers must consult on them.
As well as providing the foundations to modernise the administration of the current system, including to support a more effective and efficient appeals system, the amendments will facilitate greater amounts of information being shared than is currently the case. For example, section 6 allows ministers to specify by regulations what information assessors must provide in the valuation notice. That may in future include the information that is currently publicly available on the assessors portal for around 60 per cent of properties in summary valuations.
The Barclay appeals sub-group called for the provision of that type of information to be subject to a statutory requirement. The private representatives of that group also called for assessors to publish information—subject, of course, to the general data protection regulation and commercial sensitivities—relating to the comparable properties that were drawn on to calculate a property’s rateable value. That could amount to a significant amount of information that cannot reasonably be sent in postal form.
In the context of the climate emergency, I am keen to work with assessors and ratepayers to see how we can modernise the whole system in advance of the 2022 revaluation, particularly in light of the current figures. As things stand, assessors are required to send around 800,000 letters at each revaluation—400,000 at the draft valuation stage and 400,000 at revaluation.
I hope that the committee agrees that a move to a paperless system is in the best interests of all concerned and that there also needs to be the right opportunity to consult.
I move amendment 50.
Amendment 50 agreed to.
Amendment 51 moved—[Kate Forbes]—and agreed to.
The Convener
Amendment 4, in the name of Andy Wightman, is in a group on its own.
Andy Wightman
As members will be aware, last week we agreed to amendment 9, which inadvertently removed section 153 of the Local Government etc (Scotland) Act 1994. That was not my intention, and I put on the record that we will revisit that at stage 3.
Amendment 4 provides that the secondary legislation that is enacted under the powers in section 153 of the 1994 act should be subject to the affirmative procedure. Committee members will probably remember with great fondness our meeting on 20 March this year, in which we considered nine or 10 instruments relating to non-domestic rates. Eight Scottish statutory instruments were passed under the powers in section 153 of the 1994 act. One of those SSIs—the one for the small business bonus scheme—dealt with reliefs to the tune of £250 million to £270 million. When the Government spends that amount of money—that is what the Government is doing; it is giving that money to local authorities—the instrument should be subject to affirmative procedure.
On 20 March, we also passed the annual rate order to set the rate for the second-highest-yielding tax in Scotland—the amount involved is just under £3 billion. That was a negative instrument. Two years ago, I had to move a motion to annul in order to bring the cabinet secretary to the committee to have a debate about the rate of Scotland’s second-highest-yielding tax. It seems to me to be inconsistent that we have an income tax resolution that is fully debated in the Parliament and is subject to a full vote and a great deal of scrutiny as part of the budget process but just under £3 billion of public finance is raised via the negative procedure. Amendment 4 deals with the question of reliefs, which I think should be subject to affirmative procedure, and I intend to lodge an amendment at stage 3 to amend section 7B of the Local Government (Scotland) Act 1975 to apply the principle of switching from a negative to an affirmative instrument to the order setting the annual poundage rate. I would be interested in the minister’s views on that.
I move amendment 4.
Kate Forbes
I will respond very briefly to Andy Wightman’s opening remarks. I accept that the debate about whether the regulations setting up those reliefs should be subject to affirmative or negative procedure has moved on considerably since last week, because of the repeal of section 153, but that is a discussion for another day. The points that I am about to make are not valid if the repeal of section 153 goes ahead.
For two reasons, I challenge any suggestion or inference that non-domestic rates policy decisions are not currently subject to parliamentary scrutiny. First, the committee and Parliament do scrutinise legislation carefully. Non-domestic rates decisions have been set out as part of the Scottish budget for a number of years and are subject to extensive consultation and scrutiny throughout that process. That gives Parliament and ratepayers a clear and explicit indication of the Government’s policy intention, which was a key recommendation of the Barclay review. At the conclusion of the budget process, the Scottish Government routinely lodges eight to 10 instruments to bring into effect various rates and reliefs that need to be considered and in force for the start of the new financial year. Those will largely contain very technical details within the strategic boundaries that are set by the budget process. I suggest that the committee does not need me to appear before it to explain the detail of each, but I would be delighted to appear before the committee, if it thought that that was important, to talk about the technical details of those instruments. That can be done without changing the procedure. The committee can invite me to discuss a negative instrument if it wishes.
I do not see the advantage of amendment 4. It does not give the committee greater powers; the committee can scrutinise as it has always done. I do not quite see what is broken right now that needs to be fixed. If the amendment seeks change for the sake of change, I cannot support it, but I am very clear that, if the committee wishes me to speak to any of the instruments that will inevitably be lodged and subjected to scrutiny, I am always happy to accommodate the committee.
Andy Wightman
There is an established practice in Parliament—certainly since I came here and began observing the way in which primary legislation is enacted—that consideration is given both by the introducer of the bill and in more detail by the Delegated Powers and Law Reform Committee to whether specific powers and legislation should be subject to affirmative or negative procedure. That consideration tends to be based on the significance and import of the measure concerned.
I take the minister’s point that there are a variety of reliefs under section 153. In March this year, we had the Non-Domestic Rates (Telecommunication Installations) (Scotland) Amendment Regulations 2019 which, from memory, was a fairly minor SSI. However, we also had the Non-Domestic Rates (Levying) (Scotland) Regulations 2019, which provided for this financial year’s small business bonus scheme, which was £270 million of public expenditure. As a matter of principle, were we to draft legislation today that gave the powers that are contained in section 153 of the 1994 act, we would subject these reliefs to affirmative procedure. I am happy not to press amendment 4, on the basis that affirmative procedure would not be appropriate for all secondary legislation that flows from section 153, as some of it is minor and technical, but I disagree with the minister when she says that all such instruments are minor and technical. Public expenditure of £250 million or £270 million is not minor or technical; it is a major commitment of public finance. This year, for example we altered the thresholds.
Graham Simpson
Will the member take an intervention?
Andy Wightman
I am nearly finished. The minister says that that is part of a bigger debate on the budget. To be blunt, it might be part of that bigger debate, but specific taxes, notably income tax, are subject to a separate resolution. The minister also said that she is very keen to come here any time the committee likes. I welcome that, but it should not be subject to a member lodging a motion to annul—that is a very clumsy way of doing it.
Kate Forbes
Correct me if I am wrong, but I should have thought that the committee can invite me without needing to resort to such actions.
Andy Wightman
Absolutely—the committee will not hesitate to invite the minister along when we want to scrutinise her, but that is not the point here. We are talking about Parliament passing legislation, in this case specifically on the levying regulation, which is an instrument conferring power on ministers to spend £270 million. My point is merely that that should be an affirmative rather than a negative instrument.
11:00However, in recognition of the fact that section 153 of the Local Government etc (Scotland) Act 1994 provides that there should be a variety of instruments, the financial consequences of some of which will be substantial, with those of others being more minor, I will not press amendment 4, but I want to speak to the minister between now and stage 3 with a view to ensuring that things such as the small business bonus scheme and any other relief whose quantum is over a certain threshold are dealt with, as they should be, in an affirmative instrument.
Graham Simpson
Given that Mr Wightman does not intend to press amendment 4, I might not have to say anything. If he had decided to press it, I would have supported it, having heard the various contributions. What he has said is very important. When we are dealing with large amounts of money, the negative procedure should not be used. The level of parliamentary scrutiny is very important. It is technical stuff, but it matters.
I take on board what Mr Wightman has said. If he changes his mind and presses amendment 4, I will support it. If he does not, that is fine; we can look at the issue for stage 3.
Andy Wightman
I thank Mr Simpson for that. In view of his ringing endorsement of amendment 4, I might press it. I am merely putting on record that an adaptation will be necessary before stage 3, because I recognise that some of the instruments in question are technical.
That said, as the minister correctly pointed out, the practice is that all such instruments come in a bundle. This year, they came to us on 20 March. They all come then because they have to be in place for the start of the new financial year. In practice, if the levying regulations for the small business bonus scheme were subject to the affirmative procedure, the minister would be here anyway, so it would not make much difference.
As Graham Simpson said—he has some authority in this area, as the convener of the Delegated Powers and Law Reform Committee—if we are spending large sums of public money and are changing the quantum, the thresholds and the rates every year, such specific legislative provisions should be subject to the affirmative procedure, albeit that I totally accept that those matters can be the subject of parliamentary debate and broader debate. My point is very straightforward.
The non-domestic rate (Scotland) order should also be subject to the affirmative procedure, although I concede that I have not lodged an amendment to that effect. I am not sure whether the minister was agreeing that that order should be subject to the affirmative procedure; I do not think that she was. At any rate, I will lodge an amendment to that effect at stage 3.
Kate Forbes
I was going to add something, but Mr Wightman has finished.
Andy Wightman
I have.
The Convener
Are you going to press amendment 4?
Andy Wightman
What the hell. I will press it.
The Convener
The question is, that amendment 4 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
The Convener
The result of the division is: For 4, Against 2, Abstentions 0.
Amendment 4 agreed to.
Section 14—Assessor information notices
Amendment 52 moved—[Kate Forbes]—and agreed to.
The Convener
Amendment 53, in the name of the minister, is grouped with amendments 54 to 64 and 66.
Kate Forbes
The amendments in the group relate to civil penalties for failure to comply with assessor information notices. Before I go into the detail of each amendment, I would like to emphasise the importance of information sharing between the ratepayer and the assessor, which the committee also identified. In a letter to the committee dated 25 October, the Scottish Assessors Association said:
“The non-domestic rates system is entirely based upon accurate information being returned to the Assessor in time to ensure that the Assessor can arrive at the correct valuations. Such a process is essential to allow ratepayers to be confident in their assessment and to reduce the time and cost of dealing with proposals and appeals.”
There is among the majority of stakeholders recognition of the need to reform the current appeals process. We are doing that, but we also need to build trust in the system overall. One way to do that is to require assessors to provide more information to people so that they can understand their valuations better. The bill gives ministers the power to do that.
Another way to increase confidence in the system is by increasing the accuracy of valuations. In a submission to the committee for an evidence session on 26 April 2017, the Scottish Assessors Association highlighted that, in the licensed premises sector, just a little over 50 per cent of the rental and turnover information had been returned. Despite that, three quarters of the 74,000 revaluation appeals for the cycle that have been resolved to date have resulted in no change to the rateable value. If information return rates go up, I am confident that the accuracy of valuations could be even better, which will, over time, reduce the need to appeal.
I shall speak in detail only about the key amendments in the group, the others being technical and consequential on them. Amendment 53 responds to the Scottish Assessors Association’s request, during stage 1 evidence to the committee, that the period for compliance with an assessor information notice be shortened from 56 to 28 days.
Graham Simpson
I want to ask about that shortening. Just 28 days to respond does not sound like an awfully long time to me. People could be on holiday, for example, and could easily miss that 28-day deadline. Obviously, 56 days is double that. How did you come up with 28 days? I can easily see situations in which people, through no fault of their own, would not meet that deadline.
Kate Forbes
We originally put 56 days in the bill, but the assessors highlighted that that would be a serious problem because of the need to get information up front. I repeat that in one sector in particular, only a little over 50 per cent of information was returned, which is not acceptable when appropriate information is needed in order to make judgments. It is no wonder that the number of successful appeals is so high when valuations reflect poor provision of information.
As for the 28 days, that is a judgment call on the basis that businesses should be able to turn the information around within a month. Businesses should probably be working to provide that information within a month, anyway. One hopes that they would have the information already and that it is not new information. That is borne out in comments to the effect that information is sometimes withheld intentionally in order that it can be provided later at an appeal.
Graham Simpson
I do not think that there is a right and wrong: it is about striking a balance. However, the owner of a small business, for instance, might be away. They could have taken a month’s holiday—if they are lucky—and therefore be unable to meet a 28-day deadline. I accept the fundamental point, but there might be a balance to be struck between 28 and 56 days.
Kate Forbes
Yes. I am not dead set on the period, but in the context of three-yearly revaluations and a one-year tone date, one month really matters. Assessors will have only 12 months, from 2024, to make revaluations: they will not be able to afford to sit and wait for three months for the information. I take your point, but businesses work to one-month deadlines for a host of other matters. It would be very poor practice if, knowing that a revaluation was coming down the line for which they are expected to provide information, they did not factor that in, but instead went on holiday for a considerable period.
It is a judgment call. We are obviously working with very small businesses as well as with very substantial businesses. The substantial businesses should not be sitting on information for three months. One month is what the assessors have identified as appropriate. Assessors use their judgment—they do not leave it behind when it comes to tailoring responses to small businesses.
Graham Simpson
Given that it is a judgment call, would you be willing, should amendment 53 be agreed to, to enter discussions on the matter before stage 3?
Kate Forbes
I would need to see substantial concrete evidence that contradicts what the Scottish Assessors Association is calling for, which is born of comments by assessors and businesses. We cannot overstate how profoundly important it is that we deal with the appeals system, given that we are moving to three-yearly revaluations.
Businesses en masse welcome the move to three-yearly revaluations, but that will not happen if we do not get the appeals process right. However, we cannot get the appeals right if we do not get information sharing right, and we cannot get information sharing right unless we give the assessors the appropriate powers.
Andy Wightman
We have just agreed to amendment 50 on electronic communications in relation to paying—at least, I think we did.
Graham Simpson
Yes, we did.
Andy Wightman
My understanding is that that will not apply to assessors who request information. The valuation roll is partially digital at the moment. Should we have a system in which people are communicated with electronically and are asked to log on and enter the information that is requested? Basically, that information is the amount of rent that they will pay in that year. The process should take no more than 48 hours. The bill says that
“an ‘assessor information notice’ is a notice in writing”.
Do you envisage everything being done electronically, and does the bill provide powers to enable that?
Kate Forbes
We will have the option to move all aspects of the process to electronic systems. That is certainly where I would like us to end up, so that we do not have letters being posted and perhaps being lost. I would like everything that could be electronic to be electronic. The thrust of the bill, including amendment 50, is to make electronic systems the default, with the obvious need for a caveat about there being options. I certainly want us to achieve Andy Wightman’s vision of everything being electronic.
Andy Wightman
Will you clarify—
The Convener
You will have a chance to speak in the debate, Mr Wightman. Let the minister say her bit, then others can come in before the minister winds up.
Andy Wightman
Okay.
Kate Forbes
Amendments 54 and 56 to 58 will amend the civil penalty amounts. Under the amounts that are currently set out in the bill, it would take, for a property with a rateable value of £7 million, nearly 1,000 years for a penalty to reach its rateable value, which is the upper limit. That is not commensurate with an annual rates bill of £3.6 million. In particular, we must consider that withholding information could mean savings of tens of thousands of pounds due to the rateable value being lower than it would have been if the assessor had had the information.
The penalties must be appropriate and commensurate with the potential savings that could arise from withholding information from assessors. Moving to a percentage basis for the penalty, rather than using absolute amounts, allows for that. That is why amendment 56 will replace the first penalty with whichever
“is the greater of ... £200, and ... 1% of the rateable value of the lands and heritages concerned for the day on which the penalty notice is given”.
Amendment 56 also specifies that, if the property is not yet entered in the roll, the penalty will be £1,000. Currently, the bill does not provide for that situation.
Amendment 57 will increase from 21 days to 28 days the time for provision of information before a person is liable to a further penalty after the first penalty notice is given. That is a point of fairness.
Amendment 58 will replace the second penalty amount with
“the greater of ... £1,000, and ... 20% of the rateable value of the lands and heritages concerned for the day on which the penalty notice is given,”
or £10,000 if the lands and heritages concerned are not yet entered on the roll.
Amendment 59 specifies that
“If the person fails to comply with the assessor information notice within ... 56 days”
of being liable for a penalty, they will become liable to a further penalty that is equal to the rateable value of the property, or £50,000 if the lands and heritages are not yet entered on the roll.
Amendment 66 will ensure that
“An assessor must pay any money that is recovered under”
the penalties to the Scottish consolidated fund. The amendment specifies that
“an assessor may do so after deduction of reasonable expenses incurred in relation to the giving of penalty notices under section 18 and the collection of penalties.”
Amendment 66 will also enable the Scottish ministers to make provision by regulation about expenses that can be deducted, and provides that those regulations will be subject to negative procedure.
I am happy to answer questions on the amendments in the group.
I move amendment 53.
The Convener
I remind everybody that, once the mover of the lead amendment in a group has spoken, members have a chance to speak and can ask questions of the minister. However, this is not a question-and-answer session, so please ensure that interventions are short and to the point.
11:15Andy Wightman
On my previous point about electronic communications, it is my understanding that, under provisions that we have just agreed to, the assessor information notices can be electronic.
Kate Forbes
Yes.
Andy Wightman
That is fine. Forgive me if I am incorrectly raising this question, but on amendment 56, if we go to a 28-day period in section 14—
Kate Forbes
Are you talking about amendment 57?
Andy Wightman
No. I am talking about amendment 56, which includes the words:
“For the purposes of subsection (2)(b)”.
Is my understanding correct that, if a ratepayer fails to respond within 28 days or 56 days—depending on where we go with that—and their property has a rateable value of £3 million, they would be liable for a fine of £300,000?
Kate Forbes
Yes.
Andy Wightman
I wonder whether that is—
The Convener
Minister—you know that you can answer questions when you sum up.
Kate Forbes
I am sorry. I will answer the questions at the end of the debate.
The Convener
That will mean that there is no question-and-answer session.
Andy Wightman
I simply wonder whether the approach is proportionate. I understand the arguments that the minister has put forward on assessor information notices and moving to 28 days, but I wonder whether a £300,000 fine on a £3 million property for being a day late is proportionate. I think that there would be a £700,000 fine in relation to the Parliament building. It is a genuine question. I wonder whether, where there is no intention to delay, that approach would be proportionate.
Graham Simpson
I thank the convener for allowing me to ask the minister some questions earlier, because the answers were useful, and they helped to clarify things in my mind. I was genuinely wrestling with amendment 53 and the balance between 56 days and 28 days. I do not think that a balance has been struck, so I think that I will oppose amendment 53 at this point. I hope that we can get some movement on the issue at stage 3.
Andy Wightman has just spoken to amendments 56 to 59, which deal with penalties. A judgment call is involved on the balance. I am quite taken by what he said about potential fines being out of kilter. The Scottish Property Federation made the same point to the committee. I am therefore probably swayed against the amendments, at the moment.
Annabelle Ewing
Will the member take an intervention?
Graham Simpson
I will. I had just finished, but I am aware that I prevented Ms Ewing from speaking earlier, so I would love to hear from her.
Annabelle Ewing
Thank you. Graham Simpson might not be keen on the approach that is proposed, but we took evidence and there is enthusiasm for moving the system into a different space in which it works much more effectively with incentives and penalties for not complying. What penalty level does Graham Simpson think would be satisfactory, as he is not keen on the approach that has been put forward?
Graham Simpson
I do not have a figure in mind, although I have genuinely wrestled with the issue and the figures in the bill feel too high.
The Convener
It is fair to say that Andy Wightman’s example was quite extreme, although it was legitimate. We had the same problem at stage 1: we all agreed that something had to be done, but we were not quite sure what to do.
Graham Simpson
Absolutely. I agree that something has to be done. As we discussed earlier, it is about striking a balance.
The Convener
I am not sure whether that helps at all, minister.
Kate Forbes
It does. May I respond now?
The Convener
Yes.
Kate Forbes
I agree with all members that a judgment call is involved. I want to emphasise that the core problem in the non-domestic rates system is the withholding of information and appeals, which will have come through to the committee in evidence.
If we look at the significant percentage of ratepayers who withhold information that assessors must then chase—when they are already busy enough—we see that something must be done. We will be unable to deliver three-yearly revaluations if assessors do not have stronger powers on information sharing. If there are no penalties for, or consequences of, not providing information on time, a move to 28 days, 56 days or something in between would be irrelevant.
The penalties are not intended to be revenue raising. If they were, they would probably be much lower, because it is more likely that ratepayers would make a judgment call as to whether to pay or whether to withhold information. The penalties are intended to be effective in delivering what assessors say is critical for their role, which is that they get the information that they need in plenty of time. It is important to state that assessors have powers to remit or reduce penalties, and that penalties can be appealed to the valuation appeal committee, which gives ratepayers access to justice. Assessors are good at using their judgment when it comes to ratepayers.
The penalties amounts might seem to be high, but if we take, for example, the large business supplement with a poundage at 51.6 per cent, large properties pay their rateable value’s worth in tax in less than two years. In many cases, withholding information can lead to a significantly lower rateable value. For those who wish to avoid tax in that way, is it better to pay the penalty and withhold the information or to share the information and pay their rates bill?
Annabelle Ewing
We took quite a bit of evidence on that at stage 1. It has just occurred to me that there is a key issue of fairness for people who comply and provide information, and who see others—for whatever reason—not doing so.
Kate Forbes
There is the key issue of fairness. It is an issue of fairness in the appeals system, as well. In reforming the appeals system, my priority is to make sure that those who deserve a reduction in their rates bill get the access to justice that they need.
I will be blunt: at the moment, people withhold information knowing that they will be able to provide it in the appeal process and have their rates bill reduced. That is borne out by the figures. I would rather that people provided full information, which they should be able to do anyway, so that those who deserve access to justice and need to see their valuation reduced can do so through an appeals system that is not clogged up.
For me, it is about access to justice and fairness. The penalties are intended to be effective. They are not intended to raise revenue. They will be effective only if they are significant while still allowing for mitigating circumstances, in which assessors have the opportunity to reduce and remit them.
The Convener
As was mentioned earlier, if a small business is struggling to meet the deadline and makes the assessors aware of that, could they get an extra week or whatever to get their figures in?
Kate Forbes
That would be for the assessors to judge.
The Convener
Is that a possibility?
Kate Forbes
That possibility exists. Because of how the system works, assessors usually know their ratepayers inside out. They have relatively good relationships with them. If you look at how we are reforming the appeals system more generally, you will see that we are formalising what already takes place informally, which is casual conversations between assessors, which then move to the formal appeals system. Assessors know their ratepayers and are able to make such calls.
More than 40 per cent of properties also get the small business bonus. For the system to be effective, we want a penalty amount that reflects, or is on the same scale as, the rates bill. That means that people who have a substantial rates liability would pay substantially more in penalties than those who have smaller liability who should not pay the same level of penalty.
For me, it is about having an effective and fair appeal system. I know that the figures might cause some alarm, but they are not designed to raise revenue—in other words, to get as much money as possible—but to make it very clear that we expect ratepayers to comply with their duty to share information.
Alexander Stewart
You are indicating 28 days. Will that be the timescale? You indicated that the assessor will have knowledge of what businesses are doing, but will that clamp down after 28 days?
Kate Forbes
There are two elements to your question. Amendment 57 will increase from 21 to 28 days the timeframe for provision of information after the first penalty notice was given, before a person is liable to a further penalty. The change that Graham Simpson was talking about was about the move from 56 days to 28 days, which was in response to requests that the period for compliance with an assessor information notice be shortened. There are two discussions about timeframes.
I press amendment 53.
The Convener
The question is, that amendment 53 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green
Against
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 4, Against 2, Abstentions 0.
Amendment 53 agreed to.
Section 14, as amended, agreed to.
Section 15 agreed to.
Section 16—Duty to notify changes of circumstances
The Convener
Amendment 96, in the name of Sarah Boyack, is in a group on its own.
Sarah Boyack
I listened carefully to the previous discussion about timescales. The point of amendment 96 is to give companies more leeway when they notify changfes of circumstances. The current requirement is for them to do so within 21 days, which seems an incredibly short period. Adding 21 days to take it from three weeks to six weeks will ensure that companies that are going through changes in their business do not inadvertently fail to notify their change of circumstances.
I am keen to get an assurance from the minister that there will be increased communication of the requirements that companies will face once the provisions are in force, so that they are aware of the changes and when they will take effect. My points here are similar to those that I made about independent schools. Aspects of the bill will mean huge changes for many businesses, so we will need to ensure that they are up to speed on the changes. The point of my amendment is to encourage businesses to comply by giving them a bit more time to get their notice organised, and I hope that colleagues will support it.
I move amendment 96.
Graham Simpson
I will certainly support amendment 96 for the reasons that I outlined when I spoke to amendment 53. It will provide the right balance: 21 days is too short a period, and 42 days seems about right. Maybe we can get to that position with the minister in relation to her amendment 53.
Kate Forbes
First, I will speak to Sarah Boyack’s point about supporting ratepayers before the changes are made. Throughout the process, I have had extensive consultation, meetings and engagement with most of the representative bodies, including the Federation of Small Businesses, the Scottish Retail Consortium and others that are too numerous for me to name. I have taken seriously the job of providing information up front and supporting those bodies to support their members, and I know that the committee has carried out a lot of consultation. I would therefore like to think that the changes are high on people’s agendas and that they know that the changes are coming, not least as many of them will be very welcome to ratepayers—particularly the move to three-yearly revaluations and the changes to get appeals right.
On the change to the timeframe that is proposed in amendment 96, I note that, notwithstanding my earlier comments about information sharing, which is the most critical element of the bill, it is important that local authorities have accurate, up-to-date information and that ratepayers have the opportunity to make changes. Such changes can be quite diverse. There are a host of possible changes, some of which are more profound than others, and up-to-date information will enable the most appropriate relief to be applied. It is not just about the tax liability. Those are important factors in ensuring that all ratepayers contribute their fair share to the cost of public services.
11:30Most ratepayers do what is asked of them and comply with requirements, but there are those who do not. They might fail to notify the local authority of a change in tenant or to respond to a direct information request from the local authority. The introduction of a civil penalty will empower local authorities to seek better compliance.
I note the comments that Sarah Boyack has made. It is a matter of judgment. Ratepayers face differing circumstances—they differ in size, apart from anything else. An argument can be made for ratepayers to be given a longer, but still clearly defined, timescale. In the spirit of not rejecting all good ideas that come from the committee, I will be delighted to support amendment 96.
Sarah Boyack
In that case, I had better press amendment 96. It is a matter of judgment, but it is about providing more information to everybody so that those who can comply more quickly will do so and those for whom it is difficult will also be able to comply, but with a little more time in which to do so.
The Convener
In the spirit of the confusion that we had earlier, Sarah Boyack could have withdrawn her amendment, but she has chosen to press it.
Amendment 96 agreed to.
Section 16, as amended, agreed to.
Section 17 agreed to.
Section 18—Civil penalties for failure to comply with assessor information notices
Amendments 54 to 63 moved—[Kate Forbes].
The Convener
Does any member object to a single question being put on amendments 54 to 63?
Graham Simpson
Yes.
The Convener
I knew that you were going to say that.
Amendments 54 and 55 agreed to.
The Convener
The question is, that amendment 56 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
Against
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 4, Against 2, Abstentions 0.
Amendment 56 agreed to.
Amendment 57 agreed to.
The Convener
The question is, that amendment 58 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
Against
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 4, Against 2, Abstentions 0.
Amendment 58 agreed to.
The Convener
The question is, that amendment 59 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
Against
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 4, Against 2, Abstentions 0.
Amendment 59 agreed to.
Amendments 60 to 63 agreed to.
Amendment 97 moved—[Sarah Boyack].
The Convener
The question is, that amendment 97 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Wightman, Andy (Lothian) (Green)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
The Convener
The result of the division is: For 2, Against 4, Abstentions 0.
Amendment 97 disagreed to.
Section 18, as amended, agreed to.
Section 19—Penalties under section 18: appeals and enforcement
Amendments 64 and 65 moved—[Kate Forbes]—and agreed to.
Amendment 98 moved—[Sarah Boyack].
The Convener
The question is, that amendment 98 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 1, Against 5, Abstentions 0.
Amendment 98 disagreed to.
Section 19, as amended, agreed to.
After section 19
Amendment 66 moved—[Kate Forbes]—and agreed to.
Section 20—Civil penalties for failure to comply with local authority information notices and for failure to notify changes in circumstances
Amendment 99 moved—[Sarah Boyack].
The Convener
The question is, that amendment 99 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Boyack, Sarah (Lothian) (Lab)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 1, Against 5, Abstentions 0.
Amendment 99 disagreed to.
Section 20 agreed to.
Section 21—Penalties under section 20: appeals and enforcement
The Convener
Amendment 67, in the name of the minister, is grouped with amendment 69.
Kate Forbes
Amendment 69 provides that Scottish ministers may make provision by regulations on the collection of civil penalties that are imposed under section 20 for failure to comply with local authority information notices and failure to notify changes in circumstances. The amendment provides the Scottish ministers with the power by regulations to enable councils, for instance, to handle the collection of civil penalties in non-domestic rates in the same way that they do in council tax.
In council tax, where the person who is liable to pay the penalty is also liable to pay council tax, local authorities have the option to add the penalty to the person’s council tax liability. The local authority can then collect the penalty along with council tax that is due, in exactly the same manner. That is an efficient, cost-effective approach, and councils may wish to have the power to do the same thing with non-domestic rates. I hope that that system is familiar to those who pay council tax.
The collection of penalties—including around the use of demand notices, the service of notices, suspension of collection during appeals and the potential offset of penalties collected if an appeal is successful—is an administrative matter and it should fall to be dealt with in regulations. As this is a complex area of law, it may be necessary under those regulations to be able to modify different acts in order to achieve the desired change, hence the extent of the powers that are provided for in amendment 69.
The regulations will be subject to the affirmative procedure if they add to, replace or omit any part of the text of an act. Otherwise, they will be subject to the negative procedure. I believe that that strikes the right balance, which was highlighted earlier in the meeting, between parliamentary scrutiny and administrative adaptability.
Amendment 67 simply contains a consequential provision that arises from amendment 69.
I move amendment 67.
Amendment 67 agreed to.
Amendment 68 moved—[Kate Forbes]—and agreed to.
Amendment 100 not moved.
Section 21, as amended, agreed to.
After section 21
Amendment 69 moved—[Kate Forbes]—and agreed to.
Section 22 agreed to.
Section 23—Anti-avoidance regulations
The Convener
Amendment 101, in the name of Sarah Boyack, is in a group on its own.
Sarah Boyack
The technical term for a business disappearing and then being reborn is “phoenixing”. The aim behind amendment 101 is to prevent people from deliberately avoiding paying tax, which is not acceptable. I welcome the support from Scottish Land & Estates for the amendment, which gives local authorities the ability to recover rates that are lost through the means that I have mentioned. Scottish Land & Estates commented that it supports the principle of increasing fairness and ensuring a level playing field among taxpayers, and it views the proposed provisions as a positive addition to the bill.
Amendment 101 would provide the legal tools that are necessary to empower local authorities to pursue any party for payment of non-domestic rates when it can be shown that it was involved in the evasion, and the amendment would protect other parties that were not involved in avoiding the payment of non-domestic rates.
I move amendment 101.
Kate Forbes
At the beginning of the committee’s meeting last week, Sarah Boyack asked me to explain the difference between her amendment 101 and Andy Wightman’s amendment 84. I said to Andy Wightman that I would be happy to have discussions about his amendment, and there might be scope to have discussions with Sarah Boyack as well before stage 3.
As I mentioned last week, I am a firm believer in tackling avoidance. The reason for part 4 of the bill is to allow ministers to tackle it as effectively as possible. As it stands, the bill requires that we consult on such regulations with assessor and local authority representatives. It is important that we do that, because it means that there will be greater input from those who administer the system than there would be with an amendment to the bill.
Sarah Boyack
On that point, in relation to a previous amendment this morning, you said that assessors know the ratepayers. I lodged amendment 101 because there are times when the assessors do not know the ratepayers because ratepayers are deliberately trying to avoid the process. Will you pick up on the point that assessors do not know the ratepayers in all circumstances?
Kate Forbes
Absolutely—that is a fair point. When I made that comment, I meant that there is an extent to which assessors understand the nature of ratepayers, so they can reduce or remit penalties. However, Sarah Boyack is quite right. I point out, though, that amendment 101 is not about assessors; it is about councils. It is important to make that distinction.
When it comes to general anti-avoidance regulations, the consultative route is my preferred approach for considering whether to provide councils with additional powers in relation to property owners and the rates liability for their property. I believe that we have found the right balance with part 4 of the bill and the powers to tackle avoidance that it creates. Therefore, for the moment, I will not support Sarah Boyack’s amendment, but I have committed to considering the points of discussion that were raised last week around amendment 84.
Amendment 101 is quite broad, and we certainly need answers to some specific questions. For example, how far back could rates be sought from an owner? I would be happy to go into more detail on the differences that I perceive between amendments 101 and 84, and I am happy to discuss both amendments if Sarah Boyack and Andy Wightman choose to work together, but I do not see a need for amendment 101. I would rather allow local authorities and assessors to inform the approach that we take on anti-avoidance.
Sarah Boyack
The minister has both reassured me and worried me a bit. She says that amendment 101 is too broad, but she is also ruling out certain factors that I think are important. It is not just about making a statement on the tackling of anti-avoidance; it is about making sure that local authorities have the necessary legal tools to do that. I think that she called into question whether local authorities need those tools, as well as assessors. That has worried me.
Kate Forbes
We are very clear—it was a key part of the Barclay review’s conclusions—that there should be increased powers around general anti-avoidance regulations. We are absolutely committed to that. The only difference of opinion that I have on the amendment is to do with how we do that. I would rather that local authorities and assessors shaped what we do through a consultative approach than that we just make an amendment to the bill. I completely understand where Sarah Boyack is coming from and I agree with the intention. I just do not think that amendment 101 is the way to do it.
Sarah Boyack
On that basis, I will not press amendment 101 at this stage, but I reserve the right to come back to the matter at stage 3, having discussed it with the minister and Andy Wightman, and depending on the result of those conversations. I do not want to drop the issue, because it is an important one and we need to firm up on it before we get to stage 3.
Amendment 101, by agreement, withdrawn.
Sections 23 to 26 agreed to.
Section 27—Procedure for anti-avoidance regulations
11:45The Convener
Amendment 70, in the name of the minister, is in a group on its own.
Kate Forbes
My remarks on amendment 70 flow neatly on from our previous conversation. In our response to the Delegated Powers and Law Reform Committee’s stage 1 report, we said that we would lodge amendments at stage 2 in response to several of that committee’s recommendations.
Amendment 70 sets out when the Scottish ministers must notify the Scottish Parliament that a consultation on draft anti-avoidance regulations has been issued—it provides that that must happen as soon as is reasonably practical after the consultation has begun, which is what the DPLR Committee asked for.
I move amendment 70.
Amendment 70 agreed to.
Section 27, as amended, agreed to.
Section 28 agreed to.
Section 29—Ancillary provision
Amendments 71 and 72 moved—[Kate Forbes]—and agreed to.
Section 29, as amended, agreed to.
Section 30—Commencement
Amendment 80 moved—[Graham Simpson].
The Convener
The question is, that amendment 80 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Against
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
Abstentions
Boyack, Sarah (Lothian) (Lab)
The Convener
The result of the division is: For 2, Against 3, Abstentions 1.
Amendment 80 disagreed to.
Amendment 81 moved—[Liz Smith].
The Convener
The question is, that amendment 81 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 2, Against 4, Abstentions 0.
Amendment 81 disagreed to.
Amendment 82 moved—[Liz Smith].
The Convener
The question is, that amendment 82 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 2, Against 4, Abstentions 0.
Amendment 82 disagreed to.
Amendment 83 moved—[Liz Smith].
The Convener
The question is, that amendment 83 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Simpson, Graham (Central Scotland) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Against
Boyack, Sarah (Lothian) (Lab)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Wightman, Andy (Lothian) (Green)
The Convener
The result of the division is: For 2, Against 4, Abstentions 0.
Amendment 83 disagreed to.
Section 30 agreed to.
Section 31 agreed to.
Long title agreed to.
Andy Wightman
On a point of order, convener. Earlier on, you used your casting vote. As I understand it, conveners of committees are entitled to use their casting vote in the manner that they see fit, which is perfectly proper. However, I think that the committee would value some guidance from you—not today perhaps, but at a future meeting—on how, in general terms, you intend to exercise that power. When you exercised that power, you named a specific member of the committee who was absent and you told us that you were voting, in effect, as a proxy. I think you said, “Kenny Gibson would have voted this way.” The exact words will be in the Official Report.
The Convener
Would you like me to explain that?
Andy Wightman
I would like to finish the point of order.
The Convener
It is not a point of order—we do not have points of order in committee—but feel free to continue.
Andy Wightman
Okay. You indicated that you were voting broadly in line with what you anticipated was the way in which the member who was not present would have voted. If that is to be your position in future, it would be useful for us to know that. For example, in circumstances in which I was absent and was not able to appoint a substitute, I would value knowing that that was how you intended to use your casting vote, so that I could inform you of my intentions.
That said, the effect of your use of the casting vote was consistent with the principle that it be used to maintain the status quo. That was the effect of your use of the casting vote earlier this morning, but I would appreciate your giving some guidance on how you intend to use it in the future.
Earlier in the meeting, I said that 1 per cent of £3 million was £300,000. That is wrong—it is £30,000.
Graham Simpson
I will speak as a fellow convener. If it comes to it, conveners can use their casting vote as they see fit. I think that you made a slip of the tongue, convener. I do not think that you meant to imply that you were using a proxy vote. That was clearly not the case. It is a casting vote, and you can vote in whichever way you see fit. On the occasion in question, I think that you used it against an amendment that I supported, but that is your prerogative, as it would be of any convener.
The Convener
Thank you for that.
I said what I said to make it clear that I was not voting to maintain the status quo but was voting in the way that I thought it was appropriate to vote. Mr Wightman is right to say that I probably should not have mentioned Kenny Gibson’s name. I voted in the way that I thought was appropriate as convener. I have the right to vote in whichever way I want.
The solution to a casting vote not being used is for members to turn up at the committee. That would be the ideal scenario. However, as Graham Simpson said and as the regulations say, my casting vote is my casting vote, and I can deal with it in whatever way I want.
That ends our stage 2 consideration of the bill. I thank the minister.
11:51 Meeting suspended.11:52 On resuming—
4 December 2019
Additional related information from the Scottish Government on the Bill
Revised explanation of the Bill (Revised Explanatory Notes)
More information on how much the Bill is likely to cost (Supplementary Financial Memorandum)
More information on the powers the Scottish Parliament is giving Scottish Ministers to make secondary legislation related to this Bill (Supplementary Delegated Powers Memorandum)
Stage 3 - Final amendments and vote
MSPs can propose further amendments to the Bill and then vote on each of these. Finally, they vote on whether the Bill should become law
Debate on the proposed amendments
MSPs get the chance to present their proposed amendments to the Chamber. They vote on whether each amendment should be added to the Bill.
Documents with the amendments that will be considered at the meeting held on 4 February 2020:
Debate on proposed amendments transcript
The Presiding Officer (Ken Macintosh)
The next item of business is stage 3 proceedings on the Non-Domestic Rates (Scotland) Bill. Members should have with them the bill as amended at stage 2, the marshalled list of amendments and the groupings of amendments.
I remind members—although I am sure that this is all familiar—that the division bell will sound and proceedings will be suspended for five minutes for the first division of the afternoon. The period of voting for the first division will be 30 seconds, but after that, the voting period will be one minute for the first vote in every group. Members who wish to speak in a debate on any group of amendments should press their request-to-speak buttons as soon as I call the group.
Section 3—New or improved properties: mark in valuation roll
The Presiding Officer
Group 1 concerns minor and technical amendments. Amendment 30, in the name of the minister, is grouped with amendments 31, 54 and 58 to 62.
The Minister for Public Finance and Digital Economy (Kate Forbes)
As the title of this group of amendments suggests, these are minor and tidying-up amendments that have no significant effects. In the interests of time, I will not explain each of them, although if any member wishes to ask me to explain the effect of a specific amendment or, indeed, all the amendments, I am happy to do so.
I move amendment 30.
Amendment 30 agreed to.
The Presiding Officer
Group 2 concerns consultation on and procedure for regulations. Amendment 1, in the name of Alexander Stewart, is grouped with amendments 2 to 5, 7, 6, 45, 8, 10, 9, 66, 11, 13, 12, 67 and 14.
Alexander Stewart (Mid Scotland and Fife) (Con)
Amendment 1 would impose a duty on Scottish ministers to consult relevant stakeholders when making regulations under proposed new section 2A(6)(a) of the Local Government (Scotland) Act 1975, concerning the definition of buildings, or when laying draft regulations under new section 2A(6)(b) of that act, concerning the definition of “relevant interests” with regard to improvement of properties. Consultation provides for an additional layer of scrutiny in regulations. Imposing on Scottish ministers that duty to consult will ensure that any regulations are exposed to critical comment from stakeholders, which might improve the regulations and help to avoid further difficulties.
I move amendment 1.
Willie Rennie (North East Fife) (LD)
I thank Alexander Stewart for lodging his amendments. About a dozen of them call for more consultation on regulations or change the procedure from the negative to the affirmative. I agree with the ideals behind the amendments, and we will support them.
However, I remember that, two years ago, the Conservatives did exactly the same thing when they proposed amendments to the UK Withdrawal from the European Union (Legal Continuity) (Scotland) Bill to toughen up the scrutiny of ministers, and lots of those were agreed to. Then they decided that they would rather rely on the United Kingdom’s withdrawal legislation, which undid all those enhanced scrutiny measures.
I am happy to support the amendments in this group; I just hope that the Conservatives support them for more than a few weeks.
Kate Forbes
I agree that subordinate legislation should be appropriately consulted on and scrutinised. I am supportive of consultation and am always happy to listen to well-thought-out suggestions on how it can be improved. I have been happy to work with Alexander Stewart since stage 2 on improving a number of amendments—I hope that that was of assistance to him.
The Scottish Government agreed with the Delegated Powers and Law Reform Committee that consultation should be required on regulations that make provision about fees in relation to proposals to alter an entry in the valuation roll. For that reason, I support amendment 3. I also support amendment 4, which clarifies that representatives of local authorities, assessors and businesses, and other persons whom ministers consider appropriate, must be consulted in relation to proposed regulations.
Beyond amendments 3 and 4, I understand Mr Stewart’s concern that consultation should be a legal requirement. The rate system is complex and we need to draw on expertise through consultation to ensure that we get things right. Therefore, I also support amendments 1, 2, 45, 8, 66, 11 and 67.
However, I do not support amendment 5, which would add a consultation requirement to section 8C, which is on the setting of rates by local authorities and which we will come on to shortly. I oppose that section in principle and will propose that it be removed from the bill. I live in hope that the Tories will share my views at that point.
On amendments 7, 6, 10, 9, 13 and 12, although I am prepared to support some requirements for consultation, the DPLR Committee did not think that the proposed approach was worth comment. I struggle to see why the affirmative procedure would be more appropriate than the negative procedure. I therefore do not support amendments 5, 7, 6, 10, 9, 13, 12 and 14.
The Presiding Officer
I call Alexander Stewart to wind up, and to press or seek to withdraw amendment 1.
Alexander Stewart
I have no further comment. I press amendment 1.
Amendment 1 agreed to.
Amendment 31 moved—[Kate Forbes]—and agreed to.
Section 3A—Power of Scottish Ministers to remove the exempt status of lands and heritages
The Presiding Officer
Group 3 is on the power of the Scottish ministers to remove exempt status of lands and heritages. Amendment 32, in the name of the minister, is grouped with amendments 33, 34 and 22.
Kate Forbes
I start by speaking to Peter Chapman’s amendment 22, because I want to reassure him. I am not 100 per cent sure of the intention behind his amendment, but if he is fearful that section 3A might result in certain types of properties that are currently exempt from rating, such as agricultural land and buildings, being rated, I put on record that that is not the case. When the issue came up for debate at stage 2, the Scottish Government unequivocally rejected the potential for currently exempt agricultural land and buildings to be added to the roll. Section 3A is merely about the power to add as well as remove exemptions. It is very technical. However, I am sure that Mr Chapman can speak to that in his own remarks.
Section 3A was introduced into the bill by Andy Wightman at stage 2. The new section introduces the power for Scottish ministers to remove, by regulations, any exemptions or exclusions from the valuation roll that are set out in primary legislation. It is my understanding that the power that Andy Wightman proposed is not intended to extend to dwellings, and that there is no need for it to do so.
Amendment 32 is very technical in nature, as it clarifies the wording in section 3A. In conjunction with amendment 33, it specifies that ministers may, by regulation, make provision requiring that lands and heritages other than dwellings be entered in the valuation roll.
Amendment 34 specifies that
“‘enactment’ includes an Act of the Scottish Parliament and an instrument made under such an Act.”
For technical reasons, the amendment that was agreed to at stage 2 would cover only Westminster legislation.
In line with the spirit of my opening remarks, it is also worth my putting on record that the power that is provided by section 3A would not be used to remove an exemption from rates that is set out in reserved legislation. An example is the exemption of lighthouses, buoys and beacons from paying rates, which is set out in the Merchant Shipping Act 1995. We have no power to interfere with such matters.
Murdo Fraser (Mid Scotland and Fife) (Con)
I thank the minister for that explanation. Could the power that is envisaged in amendments 32 to 34 be used if the Scottish Government were to change its policy on agricultural land or buildings to bring them within the scope of the rates system?
Kate Forbes
That is a helpful question. Currently, the types of property that attract exemption from being entered on the valuation roll can be amended or removed from the list of exemptions only by means of primary legislation. Amendments 32 to 34 would provide additional flexibility in section 3A to do that by means of secondary legislation instead.
As I have said, the Scottish Government already has the power to exempt properties from the system, but not to add to the list of exemptions—if, in the future, some properties that had previously been exempted needed to be added back in, for example. At the moment, the list includes agricultural land and buildings, fish farms, properties associated with fishing or bee keeping, forestry, woodland, stud farms, sewers, rural ATMs and offshore premises. However, that policy will change at some point. Amendments 32 to 34 would enable whichever Government might then be in power to be more flexible in adding properties to the list or removing properties from it.
Mr Fraser is therefore right to say that amendments 32 to 34 would give the Government more power. However, the arguments used in the Barclay review against adding land and buildings that are currently exempt remain the same. Given the administrative burden that would be placed on assessors and the fact that there are significant restrictions due to state aid, I cannot envisage any Government ever wanting to use such a power.
I move amendment 32.
Peter Chapman (North East Scotland) (Con)
Before I speak to my amendment 22, I declare an interest, in that I am a partner in a farming business.
The minister is correct. Amendment 22 was triggered by my concern—and the concerns of NFU Scotland and Scottish Land & Estates—that section 3A involves the taking of an extremely wide-ranging and comprehensive power, the exercise of which could result in agricultural land and buildings that are currently exempt from rates being made subject to them in future.
As we all know, the agricultural industry is already in an unprecedented state of flux because of current political and market challenges. To be able to plan ahead, such businesses need a period of stability. Both the Barclay review and the cabinet secretary decided that agricultural land should not be subject to non-domestic rates. At the time, that decision was supported by various groups in the industry.
In recognition of the slim margins that exist in many agricultural businesses, the Scottish Government professed a desire to encourage more farmers and crofters to develop more processing activity and to earn a share of the margins that exist along the supply chain. I feared that section 3A ignored that and would add significantly to the uncertainty that farmers already face. I am delighted to say that the minister has allayed my fears in a robust and clear way. Given that she has done so, I will not move amendment 22.
Andy Wightman (Lothian) (Green)
Greens believe that all land should be on the valuation roll. Peter Chapman is incorrect to suggest that section 3A would do anything to make agricultural subjects subject to rates. However, the Barclay recommendation was that everything should be on the roll and that if exemptions are to be given, that should be done through relief schemes. Such an approach would be more transparent because we know how much such schemes cost and we can debate them publicly.
The problem with the bill as it stands is that we have a whole class of exempt lands and heritages that can be amended only by primary legislation. The Barclay review recommended that all exempt lands be on the valuation roll, but that was one of the recommendations with which the Government disagreed. The Greens believed that the Government should have agreed with the recommendation, but that boat has sailed.
As the minister referenced, my amendment on the issue was agreed to at stage 2. I am very happy that she has since worked with me to tidy up the provision. It is designed to give ministers the power to introduce regulations to remove the exempt status of any lands and heritages. Although the current Government might have no plans to do so, it is perfectly proper that the legislation should provide it—and, therefore, Parliament—with the power to do that should it wish to do so in the future. If we are to remove exemptions—which, as I have said, I think that we should—it is preferable that we should be able to do so by means of subordinate legislation rather than having to wait for another bill on non-domestic rates to be introduced.
The Presiding Officer
I call the minister to wind up and to say whether she wishes to add anything.
Kate Forbes
No, thank you, Presiding Officer.
The Presiding Officer
The question is, that amendment 32 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division. As this is the first division of the afternoon, I will suspend proceedings for five minutes while we call members to the chamber.
14:15 Meeting suspended.14:20 On resuming—
The Presiding Officer
We move to the division on amendment 32.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
The Presiding Officer
The result of the division is: For 87, Against 25, Abstentions 0.
Amendment 32 agreed to.
Amendment 33 moved—[Kate Forbes].
The Presiding Officer
The question is, that amendment 33 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
The Presiding Officer
The result of the division is: For 88, Against 26, Abstentions 0.
Amendment 33 agreed to.
Amendment 2 moved—[Alexander Stewart]—and agreed to.
Amendment 34 moved—[Kate Forbes].
The Presiding Officer
The question is, that amendment 34 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
The Presiding Officer
The result of the division is: For 88, Against 26, Abstentions 0.
Amendment 34 agreed to.
Amendment 22 not moved.
Section 4A—Entering of certain student accommodation in valuation roll
The Presiding Officer
Group 4 is on the entering of certain student accommodation in the valuation roll. Amendment 35, in the name of Sarah Boyack, is the only amendment in the group.
Sarah Boyack (Lothian) (Lab)
At stage 2, I lodged my original amendment on student accommodation because that issue was addressed in the Barclay report but was not included in the bill. I initially moved it as a probing amendment, because I was conscious of the big expansion of the private student accommodation sector and the fact that students are—rightly—exempt from council tax but the owners do not make a financial contribution to our local communities, even though they make a profit from the buildings. In summer, when students’ leases have ended, the buildings are let out for tourism purposes. I wanted to explore how the profits that are made during that period could contribute to the local taxation system, given that the visitors rely on the local services.
I was clear that I did not want my amendment to deliver any unintended consequences. However, it became clear, through the consultation that I undertook last autumn, that there would be a real danger that any new taxation that would be delivered through the legislation would directly lead to students paying even more for what is already expensive accommodation. The National Union of Students Scotland was particularly concerned about that, and its analysis of the high costs that students pay in privately built student accommodation was very helpful. Overseas students already have to pay six months’ rent in advance, which is a major challenge for students who do not come from rich families.
The differences between university-run and college-run halls and the private sector are that, unlike students in university-run or college-run halls, students in private sector accommodation have no participation in setting the annual rent for their halls, and pastoral and welfare support are not standard. However, universities and colleges face financial challenges in providing the new good-quality accommodation that students need and which is affordable, so the opportunity has been picked up by private providers.
I want us to take the issue further. I thank colleagues for agreeing to my original amendment, which added section 4A to the bill without anyone having spoken against it. However, having consulted key interests, I do not want us to risk rates being passed directly on to students through rent hikes. I spoke to a range of stakeholders, including the minister, about what would happen next. I made the case that, although I accept that the bill is not the best way to address the issue—even though it is raised in the Barclay review—action is needed beyond the bill.
We need more consultation in order to examine tax treatment of the private student accommodation sector and, crucially, student tenancies. Having had reassurances in a very good discussion with the minister, I am seeking to delete section 4A from the bill. I look forward to working with not just the Scottish Government but, I hope, with representatives from all parties, in considering how we make progress for our students. We have already seen progress on private rented sector tenancies and short-term lets, and I believe that it is time to see action being taken on student tenancies, too.
I move amendment 35.
Andy Wightman
I regret that Sarah Boyack is seeking to leave out section 4A. The section would have brought the private providers of student accommodation into the non-domestic rates regime as far as holiday letting in the summer is concerned.
Many of the companies that run private student lets are based in offshore tax havens, and I am bemused that the Labour Party would wish to allow such companies to continue to avoid paying their fair share of taxes to local authorities. Reports from the past year analysed those companies’ profits and showed returns of more than 12 per cent. If we are concerned about rents going up—that is a legitimate concern—we should not back off from that but ensure that we have regulated rents and that the extra tax that those companies pay comes out of their profits, not out of student rents.
I welcome Sarah Boyack’s commitment to continuing to work on the issue—she will have the Scottish Greens’ support for that—but I regret that not much progress has been made.
Graham Simpson (Central Scotland) (Con)
Amendment 35 is a good example of something being introduced at stage 2 to test the waters and hear the arguments, and Sarah Boyack has done absolutely the right thing. I see that the minister is getting excited.
Derek Mackay
Only when Graham Simpson speaks.
Graham Simpson
The unintended consequence of section 4A would have been students being penalised through an increase in their rents. Sarah Boyack is therefore very sensible in lodging the amendment to take out section 4A, and I congratulate her.
Sandra White (Glasgow Kelvin) (SNP)
I thank Sarah Boyack for her work on the issue, which affects my constituency very much. I have done a lot of work on the issue as well. Like Andy Wightman, I am rather disappointed that Sarah Boyack is seeking to remove section 4A, as it has always been my concern that these private sector businesses, as I call them, do not contribute to local authorities. I accept what she said about student rents going up, but I am sure that we could have looked at that point. I ask her to work closely with all parties on this. I am sorry that she is seeking to remove the section.
14:30Kate Forbes
I am grateful to Sarah Boyack for the constructive manner in which she has engaged with the Scottish Government on section 4A. I welcome and support amendment 35. Graham Simpson is right that it is an example of further conversation, in consultation with stakeholders, meaning that we will be in a better place beyond stage 3.
I support the principle behind section 4A, which, through the levying of non-domestic rates on certain accommodation, seeks to address the fact that private student accommodation is run like a business. The owners benefit from local services yet contribute nothing to the cost of providing those services. I get the impression that there is cross-party support for looking at that issue.
However, there is broad recognition that one of the unintended consequences of treating the matter as a tax problem alone is that it could result in additional costs, in the form of higher rents, being passed on by private accommodation providers to students. None of us wishes to see that outcome; the whole thrust of the amendment is to protect students.
There are wider issues than tax to be considered, including the regulation of letting and the provision of welfare services for more vulnerable students within private student accommodation. In the light of all of that, the Scottish Government is committed to exploring with stakeholders how we can use the tools at our disposal to better protect students who live in private student accommodation. After today’s debate, we will take forward that work.
The Presiding Officer
I call Sarah Boyack to wind up and to press or seek to withdraw amendment 35.
Sarah Boyack
I welcome the comments from colleagues across the chamber, which illustrate that there is support in this chamber for action on the issue. The challenge is in getting it right. When we lodge amendments at stage 2, it is difficult to get them perfect.
I agree with Andy Wightman on the issue of fairer taxes for these organisations. However, we also need to have regulated rents. It would be the worst of all worlds if the cost went up without regulation. We must make sure that we have a wider framework for that. When those units are let out during the summer, we might have a tourism levy in parts of the country. We urgently need safeguards on rents.
If colleagues agree to remove these provisions from the bill today, I hope that there is clear cross-party support for further consultation on the issue of fairness regarding the profits that are made. There should not be the unintended consequence of student rents going up. Rents are already very high in the private rented sector.
Crucially, I hope that there will be support for making sure that students have proper rental agreements. As I said, in university or college-owned properties, students are consulted about their rents, but that does not happen in the private sector. We need safeguards, and I welcome the minister’s commitment to take the matter forward. Because it crosses portfolios, it will require several ministers. Therefore, we will look to a timetable and we will seek to make progress.
The NUS representatives of students in Scotland did not want us to agree to section 4A today. They wanted us to remove it from the bill, because they wanted to make sure that safeguards are in place and that students are protected. That is central in my mind. I reiterate that this is not the end of the matter but the start of proper work on the issue. It is unfinished business from the bill.
I press amendment 35.
The Presiding Officer
The question is, that amendment 35 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Campbell, Aileen (Clydesdale) (SNP)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Corry, Maurice (West Scotland) (Con)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Golden, Maurice (West Scotland) (Con)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harper, Emma (South Scotland) (SNP)
Harris, Alison (Central Scotland) (Con)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lochhead, Richard (Moray) (SNP)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Mason, Tom (North East Scotland) (Con)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wells, Annie (Glasgow) (Con)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Whittle, Brian (South Scotland) (Con)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Finnie, John (Highlands and Islands) (Green)
Gibson, Kenneth (Cunninghame North) (SNP)
Greer, Ross (West Scotland) (Green)
Harvie, Patrick (Glasgow) (Green)
Johnstone, Alison (Lothian) (Green)
McDonald, Mark (Aberdeen Donside) (Ind)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Wightman, Andy (Lothian) (Green)
The Presiding Officer
The result of the division is: For 104, Against 8, Abstentions 0.
Amendment 35 agreed to.
Section 7—Proposals to alter, and appeals against, valuation roll
The Presiding Officer
Group 5 is on proposals to alter, and appeals against, the valuation roll. Amendment 36, in the name of Kate Forbes, is grouped with amendments 37 to 43.
Kate Forbes
The amendments in group 5 relate to reforming the appeals system. They seek to make rather technical adjustments, in order to ensure that the new two-stage appeals system will operate as intended. I ask members to bear with me, as I outline some of the technicalities.
Amendment 36 will ensure that the assessor may amend the roll to give effect to a decision on a proposal, and provides that current rules will apply to proposals and appeals under the new system, about when an amendment to the roll takes effect when an appeal has been made by a new proprietor, tenant or occupier.
Amendment 37 specifies that a person who has made a proposal or an appeal may not themselves make a proposal against the outcome of that proposal or appeal, although other persons with an interest will remain able to make further proposals.
Amendment 38 clarifies that the assessor may amend the entry, following a proposal being made in accordance with an agreement that is reached after the proposal was made. The amendment simply clarifies that the assessor cannot revive an earlier agreement, since the ratepayer cannot appeal an alteration to the roll, where it reflects an agreement that was reached after the proposal was made.
Amendment 39 allows regulations to provide that notices to be sent by an assessor in relation to a proposal can be sent to any person who has an interest in the property. At present, the bill allows provision only in relation to the person who made the proposal, but it might be desirable to require notices to be sent to others.
Amendment 40 allows regulations in relation to a proposal to specify the day from which an alteration to the roll, following a proposal, is to be made. The legislation underpinning the appeals system, which is set out in the Local Government (Scotland) Act 1975, is complex, and it is important that the system works effectively. Regulations will need to provide that type of detail to allow for the procedures and timings around proposals to operate consistently.
Amendments 41 and 42 provide that, if an assessor does not reach a decision on a proposal, and the ratepayer appeals to the valuation appeal committee, the appeal is to be treated as if the assessor had refused to alter the entry in the roll.
Amendment 43 makes it clear that regulations about the procedure to be followed in appeals can cover the evidence that can be led.
I confirmed in writing to the Local Government and Communities Committee on 3 September that the Government will consult on draft regulations to implement reform of the appeals system. That consultation will occur later this year.
Although the amendments in the group are very technical, the most important thing in respect of the Barclay review is that we get the appeals system right.
I move amendment 36.
Amendment 36 agreed to.
Amendments 37 to 40 moved—[Kate Forbes]—and agreed to.
Amendment 3 moved—[Alexander Stewart]—and agreed to.
Amendments 41 to 43 moved—[Kate Forbes]—and agreed to.
Amendment 4 moved—[Alexander Stewart]—and agreed to.
Section 8B—Meaning of “material change of circumstances”
The Presiding Officer
Group 6 is on the meaning of “material change of circumstances”. Amendment 17, in the name of Graham Simpson, is grouped with amendments 18 and 21.
Graham Simpson
All three amendments in my name give the Parliament a chance to show that it is pro-business—a theme that will, no doubt ,come up later.
At stage 2, the Scottish Government lodged amendment 38, which is now section 8B of the bill, entitled “Meaning of ‘material change of circumstances’”. The section alters Scottish non-domestic ratepayers’ appeal rights, and restricts their appeal rights when there is a change in their economic circumstances.
That stage 2 amendment was lodged by the minister based on the following two reasons. The first is that the Scottish Assessors Association wrote a letter to the Local Government and Communities Committee in which it stated that, with the move to three-yearly revaluations, it no longer saw the need for MCC appeals based on economic changes, and, furthermore, that it would bring the system back in line with other jurisdictions in the UK. The second reason is that the minister advised that many business organisations asked for a review of that part of the bill. At stage 2, we accepted the amendment in good faith, and we accepted that the reasons were sound and had been tested and consulted on with stakeholders.
Since stage 2, however, we have consulted business organisations on section 8B, and the rationale of the Scottish Government and the Scottish Assessors Association has been seriously questioned. Scottish Chambers of Commerce was “outraged”—its word—by the amendment, and has asked that the bill be amended in a way that makes it clear that economic changes could be a material change of circumstances, so that it does not take that right away. The chair of the business rates advisory group of Scottish Chambers of Commerce wrote to all the members of the committee and was highly critical of the amendment, and advised that the SAA letter was seriously flawed and contained a number of factual inaccuracies in relation to what the amendment would do.
Furthermore, it advised that it had not been consulted at all on the proposed change, even though it sits on the Barclay implementation advisory group, and that the change had never been proposed in that forum or, indeed, by the Barclay review.
So, what will be the effect of section 8B? It alters Scottish non-domestic ratepayers’ appeal rights and restricts their appeal rights when there is a change in their economic circumstances, but appears to leave open the possibility that physical changes to a property can be a material change of circumstances.
Scottish Chambers of Commerce’s view is that the section means that, even with the move to three-yearly revaluations, with a one-year tone date, the Scottish non-domestic rates system will be less responsive to changing marketplaces than the current system of five-yearly revaluations.
Amendment 17 clarifies that both economic and physical changes in an area can—or should—be a material change of circumstances, which would allow ratepayers to appeal. In the modern world, an economic change can have a similarly damaging and long-lasting effect on a ratepayer’s property value to a physical change, such as roadworks or tramworks outside the property.
Amendment 17 would bring clarity to the definition of “material change of circumstances”, and is a change that ratepayers in Scotland want, as expressed by Scottish Chambers of Commerce and the Scottish Property Federation. The 2008 recession is the perfect example: the Scottish Government’s section 8B means that there would be no relief for Scottish ratepayers if such an economic disaster were to occur again.
I urge members to support amendment 17. However, if that amendment does not have the support of Parliament, amendment 18 calls for an independent review of that fundamental part of the rates system; that is, for it to be appropriately reviewed in a way that allows proper consultation of ratepayers—which has not happened to date—so that the appeals system can be shaped by the people who actually pay the rates.
Amendment 21—the final amendment in the group—is a technical amendment that is tied to amendment 18. As such, I will move amendments 18 and 21 only if amendment 17 is not agreed to. However, amendment 17 is the one that business organisations want.
I move amendment 17.
Kate Forbes
I am somewhat surprised to see that Mr Simpson has lodged amendments to reverse section 8B, given that he agreed to amendment 38, which introduced it at stage 2. I am also surprised that amendment 17 would create regulatory powers that would be subject to no parliamentary procedure.
However, on the core substance, the changes were introduced in response to demands for clarity from ratepayers and comments by the Scottish Assessors Association, which was clear in asking Government to ensure clarity around material changes of circumstances. I will quote its letter. It said:
“Such a decision would minimise the risk of appeals, would be in line with other devolved administrations and most importantly better reflect the realities of the shorter revaluation cycle and tone date.”
14:45In a nutshell, the change will bring the system into line with the systems in England and Wales and in Northern Ireland. They better reflect the restrictions that we are already seeing through case law, and they make sense in light of the changes in the revaluation cycle that is being introduced by the bill. As members know, we are committed to introducing a one-year tone date. That will be set out in secondary legislation for the 2025 revaluation onwards. That will ensure that rateable values are much more closely aligned to current market values than they have been in recent revaluations, and it will reduce the need for economic circumstances to be debated on appeal.
I understand that some ratepayers are concerned that an economic downturn could leave them with rateable values that do not reflect the downturn, but I believe that ratepayers are concerned about their rates bills, rather than by their rateable valuations. Case law has been clear that, inevitably, there will be increases and decreases in rental values between tone dates. That, in itself, is not a material change of circumstances. Scotland is unique in the United Kingdom in having opened the door for such changes even to be considered as material changes of circumstances. However, what counts as the normal ebb and flow, compared to an economic crisis, does not need a resource-intensive debate in the courts.
I believe that the correct place for action to be taken, if and when an economic crisis occurs, is by amending rates bills. Ministers already have the tools to do that when they set the poundage, and through the relief system. We have seen ministers take that action, as Derek Mackay did for hospitality premises and for Aberdeen city and Aberdeenshire offices, at the 2017 revaluation, through the introduction of a transitional relief. I hope that we will continue to be able to introduce such reliefs, subject to our votes later today.
Amendment 18 proposes an independent review of the definition of “material change of circumstances”, as opposed to making changes now. I question what such a review would achieve, and I point out that the amendment would not provide ministers with powers to implement the recommendations of any review. I see no need for such a review in the context of three-yearly revaluations and a one-year tone date. I have spoken to Scottish Chambers of Commerce, I acknowledge that ratepayers need clarity, and I strongly urge colleagues to vote in line with the Government’s position, which is not to support amendments 17, 18 and 21.
Graham Simpson
I am disappointed that the minister is not listening to the voice of business on the amendments.
The Presiding Officer
The question is, that amendment 17 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 27, Against 87, Abstentions 0.
Amendment 17 disagreed to.
Amendment 18 moved—[Graham Simpson].
The Presiding Officer
The question is, that amendment 18 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 26, Against 88, Abstentions 0.
Amendment 18 disagreed to.
Section 8C—Levying of rates
Amendment 5 moved—[Alexander Stewart].
The Presiding Officer
The question is, that amendment 5 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Macdonald, Lewis (North East Scotland) (Lab)
Marra, Jenny (North East Scotland) (Lab)
Mason, Tom (North East Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 55, Against 58, Abstentions 0.
Amendment 5 disagreed to.
The Presiding Officer
We turn to group 7, on the setting of non-domestic rates by local authorities. Amendment 23, in the name of Andy Wightman, is grouped with amendments 23A, 44, 28, 68 to 70, 29, 71 and 72.
Andy Wightman
I am glad to speak on what I hope will be one of the highlights of the debate. As members know, non-domestic rates are a local tax. For well over a century, they were under the full control of the level of government to which they belonged—the county, and later, regional councils, before being centralised by the Thatcher and Major Governments. The power was then given to the Secretary of State for Scotland, from whom, by virtue of devolution, the Scottish ministers inherited it.
Greens believe that that was a fundamentally wrong move—Labour did at the time, too. Non-domestic rates are a local tax, belonging to local government and councils. Just as the Scottish Parliament sets Scottish tax rates, so, too, should local authorities set their local tax rates.
Amendment 23 is the substantive amendment in the group. I have always recognised, as I made clear at stage 2, that returning rate-setting powers to local authorities could not, and should not, be achieved overnight. Discussions are required between Government and the Convention of Scottish Local Authorities over the local government settlement, the fiscal framework and other matters. That is why amendment 23 allows plenty of time.
Today is the first opportunity in the history of devolution to make provision for that historical wrong to be corrected. The Parliament faces a clear choice today: vote for democracy and to make Scotland a normal European country by giving local democracy the right to control its own tax base, or to continue with the centralisation and elite power that started with Mrs Thatcher and John Major and has been continued by Labour, Liberal Democrat and now Scottish National Party Governments, which assume that the finance secretary knows best about what is good for Scotland’s local authorities.
The minister and I agree that we should remove the existing section 8C. The only difference is that she wants to remove it completely and I wish to replace it with something better. Amendment 23 would remove the existing section 8C and replace it with a new section 8C. It provides that Scottish ministers must introduce regulations to repatriate non-domestic rates by 1 April 2024. It would remove the stage 2 provisions that remove the powers of ministers to introduce national reliefs. As a consequence of my amendment, the power to introduce national reliefs such as the small business bonus scheme would remain. The minister and I agree on that, too.
That is important for members to understand. The minister’s amendment 44, and my amendment 23, both preserve national reliefs, so members can be assured that, whatever the outcome, national reliefs will be unaffected. I hope that that puts that argument to bed.
The new section 8C would allow the 2024 date to be changed by regulation, so that if four years was not enough time to have those conversations, it could be extended.
The regulations would also set out the process of rate setting, the collection arrangements and any new revenue support grant processes. Amendment 23 also allows for regulations to amend the proposed new section if any technical changes are required.
Beyond amendment 23, I have provided members with a choice between amendments 28 and 68, which are on commencement. Amendment 28 would necessitate consultation before introducing commencement regulations and, importantly, provide for a sunset clause, five years after royal assent. If, five years after royal assent, Parliament was not content that the measure should be taken, the power would simply die. Amendment 68, on the other hand, provides for commencement within 12 months of royal assent, and we will be supporting that amendment.
Voting for neither amendment 28 nor amendment 68 would also be a legitimate option. The consequence of that would be that the bill would not specify any commencement provisions and ministers would be free to bring into force as much as they wished at any time of their choosing.
If amendment 28 is agreed to, we would ask members to support the relevant technical amendments: 23A, 69, 29 and 71. If amendment 68 is agreed to, members should support amendments 23A, 70, 29 and 72.
I draw members’ attention to the fact that this is a minority Administration. In early January, the minister was invited to co-operate on the drafting of my amendments in this group, notwithstanding the fact that the Government disagrees with the policy intention. On 14 January, I was informed that the Government would not be co-operating. However, I was alerted by Government officials to some drafting issues after the deadline for amendments had passed last week, so I am grateful to you, Presiding Officer, for having admitted a small number of manuscript amendments.
I am aware that most of Scotland’s business organisations oppose amendment 23. I have spoken to most of them, and it is clear that their main concern was the abolition of the power to set national reliefs. That has now been removed from the bill.
They are also concerned about returning rate setting to councils, on the basis that they fear that rates will go up. However, that was precisely the argument that many of the same organisations used to oppose the establishment of a Scottish Parliament with tax-varying powers. Scottish businesses managed fine for over a century during which time councils set the rates. Unlike with the current regime, there was widespread consultation on what the rates should be and there was debate in the local papers, councillors were engaged regularly and there was plenty opportunity for local rate payers to engage with their local authority.
Today, most of those trade bodies are happy and content with their cosy chats with Derek Mackay, but local rates should not be the subject of private meetings between business elites and the cabinet secretary.
Mike Rumbles (North East Scotland) (LD)
Will the member give way?
Andy Wightman
Scotland is a varied place, and the place for this debate is in local communities.
I move amendment 23.
The Presiding Officer
If Mr Rumbles wishes to make a point, he can press his request-to-speak button. Four other members wish to speak, but first we will hear from the minister.
Kate Forbes
I hear the Tories trying to change the narrative in this debate, but the truth is that they have entered it doing something really quite remarkable. Their position has been opposed by the majority of Scottish businesses and the Convention of Scottish Local Authorities. The irony is that the Tories have come to this debate having voted to abolish the Scottish Government’s powers over setting relief, and tomorrow the Parliament is holding a debate on a motion demanding that the Scottish Government uses those powers to make changes to tax rates.
Today’s debate needs to be understood in relation to stage 2. To be clear, at stage 2, the Tories, Labour and the Greens voted for an amendment that jeopardised local authority funding guarantees, despite those parties appealing for more funding for local authorities. They voted to abolish the Scottish Government’s rates relief, which is worth £300 million to small businesses, nurseries and hydro schemes, to name just a few. It is not good enough for anybody to say that that was a mistake. One cannot make mistakes with more than £2 billion of revenue.
Finally, those parties voted to potentially introduce 32 different rates across Scotland. Some parties, which I respect, might ideologically believe that that is right, but to do it in one vote, without scrutiny, consultation or thought as to what it means, is no way to set changes in motion. What about rural areas, which have less flexibility over rates? What about evidence from England that suggests that rich councils have more revenue and poorer councils have less? What about utility companies—how are they assessed? Those are all questions that were raised by directors of finance at COSLA, and the amendments before us do not answer them comprehensively.
The Tories claim to be a Government in waiting and that they are ready to take up the mantle of government, but they cannot even figure out their position on the uniform business rate, which is worth £2 billion to the Scottish budget. Businesses will be watching the Tories carefully. They can see their ridiculous position of claiming to be pro-business, while voting to introduce uncertainty; of demanding tax cuts in tomorrow’s budget debate, while having voted to make it impossible for Government to provide relief; and of having been forced to think again only after a concerted campaign by 27 business organisations.
15:00Andy Wightman is to be commended for raising the profile of this issue and, indeed, the wider profile of the Non-Domestic Rates (Scotland) Bill, which the general population may have once dismissed as quite dry. I know that COSLA is keen to see fiscal empowerment, and the way in which local authorities are funded will be considered as part of the work on the fiscal framework that we will now take forward at pace.
Andy Wightman
COSLA’s leaders agreed to oppose amendment 23 on the basis that the Scottish Government has provided a written commitment to COSLA that joint work on devolution of non-domestic rates take place.
In the minister’s letter to Gail Macgregor of 31 January 2020, she says:
“I can confirm my agreement to your proposal that joint work to consider the implications of the devolution of non-domestic rates will be taken forward.”
Can she confirm that the Government is agreeing only to look at the implications, not at COSLA’s ask for actual joint work on the devolution of non-domestic rates, which was the precondition of its opposition to amendment 23?
Kate Forbes
Our commitment is to take forward the fiscal framework at pace, which includes looking at the integrated local government funding mechanisms, and all the local government taxes. The difference with this commitment, and the key point, is that we will take it forward at pace. That will include looking at the implications—that has to be part of it—but more than anything, we will look at how non-domestic rates sit within wider integrated local government funding.
I have an amendment to take out section 8C in full. We support the uniform business rate, and so the only amendment in the group that I can support is my amendment 44, to completely remove section 8C from the bill.
In response to Andy Wightman’s point, COSLA supports greater fiscal empowerment for local government; it does not appear to support section 8C. The business community does not support section 8C, and it is imperative that we have answers from the directors of finance before we make the change.
The Presiding Officer
Five members have indicated that they wish to contribute.
Murdo Fraser
This group of amendments relates to the principle of localising non-domestic rates—in other words, returning power over the setting of rates to local authorities. It is one of two issues that have generated the most heat in relation to the bill before us.
At stage 2, Andy Wightman lodged an amendment—which became section 8C—that proposed to localise rates. We now know that that amendment was defective, as it would have removed all existing reliefs, including the small business bonus. That was not Andy Wightman’s intention, but he has sought to rectify that in the amendments that he has brought before us. However, we need to consider the principle of rates localisation.
There are those in my party who are attracted to that principle, not least those who are in positions of leadership in local government, and I have some sympathy with their view. The Scottish Government tells us continually that it supports local decision making, but, when it comes to the crunch, it always seems to take a different view.
We have to see this debate on localisation of rates in two broader contexts. The first is the rating system itself, which is, frankly, creaking at the seams. The Barclay review delivered a series of worthwhile reforms, but our position remains: it was too restricted in its terms, and what is needed is a much more comprehensive review of the ratings system and how it operates. That is easily illustrated in retail, where, at the moment, businesses are suffering under the burden of business rates, while those who deal in online retail are not similarly burdened. I will discuss that matter further in the debate tomorrow.
The second context relates to local government. The whole question of funding of local government needs to be tied into a broader discussion around the powers and functions of local authorities. What are they for, and what is their relationship to central Government? Are they simply delivery agents for national policy, or do they have a status in themselves? Until we answer that question, we cannot properly answer the question as to how they might draw their sources of funding.
We have heard many voices in the business community expressing their concern that ending the uniform business rate at this stage would not be appropriate and would add risks and complications to doing business in Scotland, which is the last thing that the Scottish economy needs at this time. We have just learned that the Scottish economy is growing at less than half of the rate that the UK economy is growing, thanks to the stewardship of the SNP Government.
Andy Wightman
Does Mr Fraser accept that there is no proposal in my amendment 23 to end the uniform business rate now and that the earliest that that can be done would be 2024?
Murdo Fraser
Mr Wightman has made a very fair point, and I understand that that is the case. That is why what the minister said about issues relating to the budget for next year was absolute nonsense. Even if we agreed with Mr Wightman—which, of course, we do not—his amendment would not come into effect until 2024.
Mr Wightman has made a fair point, but we need to consider things in the two broader contexts of the damage that is being done by the current rating system in its unreformed state and what will happen to local government.
The Cabinet Secretary for Finance, Economy and Fair Work (Derek Mackay)
In considering catastrophic effects on the business community, I am very curious to know at what point Murdo Fraser and the Tories decided to abandon poor Andy Wightman.
Murdo Fraser
At stage 2 of a bill, members are quite entitled to raise issues and have a debate. That is a very valuable exercise to allow debates to be heard and for us to discuss points. We can discuss in the chamber the woeful performance of the Scottish economy under the stewardship of the Cabinet Secretary for Finance, Economy and Fair Work and his SNP colleagues, which is going so dismally.
Although we are still sympathetic to exploring the principle of localisation, we do not believe that this is the right time or that the bill is the right vehicle to deliver that policy. However, we are very happy to engage in further discussions with other parties about the future status and the future funding of local authorities.
I regret to tell Andy Wightman that, for those reasons, we will not support his amendments in the group. However, I thank him for raising the debate and allowing us to discuss very important issues.
Sarah Boyack
The Barclay review was tightly scoped by the Scottish Government, and it did not include a wider review of non-domestic rates and their role. The majority of the committee took the opportunity to amend and test the provisions of the bill at stage 2, and we were right to do so.
At stage 2, Andy Wightman’s amendment on devolving NDRs to local authorities was agreed to, as there was general support for more financial autonomy at the local level—as I think there is now. However, his amendment inadvertently deleted the capacity for the Scottish Government to provide reliefs for businesses, and that was clearly very concerning to all those who currently benefit from the small business bonus scheme and, indeed, a new relief that I had added to the bill.
Since the vote at stage 2, the business community and the Union of Shop, Distributive and Allied Workers, which is the shop workers union, have argued strongly against devolving rates, given the current economic uncertainty for town centres and fears that local authorities would increase rates. We understand those concerns. Many made the point that they did not expect that to be added to the bill, and they thought that they had not had the opportunity to contribute to our discussion.
Let me take on the point that the cabinet secretary made. I record my thanks to Andy Wightman for enabling us to have discussions over the past couple of months, because they have been valuable. In particular, I have spoken to local government colleagues about their concerns about equalisation and how much they value the principle of equalisation and sharing resources. Council colleagues whom I have spoken to are concerned about their capacity to raise the funds that they need now, given the impact of austerity and economic pressures in their areas and the need to invest in town centres to make them fit for the future. USDAW was also very concerned, and we have to listen to those who have made representations to us.
Andy Wightman
Is Sarah Boyack saying that, as a consequence of her discussions with colleagues in local government, she would prefer an SNP cabinet secretary to set their rates rather than a Labour-led council?
Sarah Boyack
At stage 2, I asked whether we could have COSLA’s views before we discussed the matter at stage 3. There has to be respect and there has to be a point at which we consult, and the Scottish Government and our local authorities must work together.
I asked COSLA to give us a briefing on its views on the amendments before we voted on them at stage 3. First of all, we received a briefing from the Scottish local authority directors of finance, which has been mentioned already. They gave us a detailed briefing last month that highlighted their concerns about the proposals.
On Friday, COSLA leaders issued a call for Parliament not to support Andy Wightman’s proposals. We should respect and listen to our colleagues, because the key thing that they want is progress on the wider fiscal framework, which is seen to have stalled. In the past few weeks, pressure has been mounting on the Scottish Government for fair funding of local government in the budget that we will be hearing about this week.
COSLA made it absolutely clear in its call to MSPs that it wants to see faster progress. Scottish Labour will vote today against the proposals to devolve NDRs in the bill, but we strongly support COSLA’s call for action on the fiscal framework. The bill presented us all with an opportunity to test the waters of financial devolution, but it is key that the wider local and additional government financing mechanisms—council tax, land value capture and a range of issues—are considered, not just NDR in isolation.
To date no real progress has been made on delivering the transformation that our local authorities urgently need. We have seen only tinkering round the edges. The potential of the visitor levy powers is something that I have strongly supported and campaigned for, but it will only ever deliver a marginal impact on revenues raised, because not all local authorities will use it.
We need action, and I hope that the minister will focus in her closing remarks on what comes after the bill to live up to the aspirations that our local government colleagues have highlighted in their representations to us. We all need to make progress.
Willie Rennie
As Liam McArthur said at stage 1, we would rather the whole bill had a broader scope and was not restricted by the limited recommendations in the limited Barclay review. It could have set out to give control of business rates to local authorities, giving them the opportunity to form meaningful and strong relationships with businesses in their areas. Linking that to their existing roles in economic development and business support and with local colleges would have given each local authority the clout to shape a more successful community.
The small retail businesses that have contacted me are concerned about amendment 23, but they are also concerned about the status quo and about the increases in rates that they expect under the current system. Margins are tight for many small businesses on our high streets and they are sick of ever-increasing rate bills. I said when the Barclay review was established that its scope was too limited. It should have done more for our high streets.
I am grateful to USDAW for taking the time to get in touch. It, too, has made the case for fundamental reform.
Amendment 23 does not change the system in the way that I would like, but it would open up the possibility of local councils and businesses working hand in hand. Previous attempts at localism by this Government have been fake localism. The business rate incentive scheme, which is a case in point, collapsed under its own contradictions.
I see a future where local councils raise half of what they spend—just like we do in the Scottish Parliament—with the other half being the pooling and sharing of resources across Scotland, just as we have in the Scottish Parliament. Amendment 23 would prevent that from happening. When I listen to the minister, it sounds as if she does not, in principle, believe in giving local authorities more power and responsibility over business rates.
Derek Mackay
Why did that principle of localism never come into effect when the Liberals were in office in the Scottish Executive? Why does it not apply to the workplace parking levy, which the Liberals oppose?
Willie Rennie
There is no point giving local authorities powers that are ineffective and will not be used. We need an effective set of powers, like those that Andy Wightman has proposed today. Those are meaningful powers that can deliver change in communities, not half-baked powers that are not well constructed
We oppose the measures, because it is right to get the right powers for local authorities. COSLA believes that it has an agreement to look at this as part of the fiscal framework between the Scottish Government and local government. Section 8C should be part of that framework. There is no reason why it should not be, so, we will be voting against amendment 44.
15:15Graham Simpson
I have been slightly concerned throughout this process that—whether it is deliberate or not—ministers do not appear to get the process of a bill, and what it is all about. [Interruption.]
I am being barracked by people who do not understand the system.
The Presiding Officer
A little bit of order, please.
Graham Simpson
Stage 2 is an opportunity to test ideas, and that is what has happened. Therefore, I congratulate Andy Wightman on his amendments. They have meant that we have been able to have a debate. It is disappointing that the Government swung into action when he got his amendment 9 through at stage 2. It went tonto and alarmed the business community—
Kate Forbes
Is the member saying that the Tories have done a U-turn today only because we finally alerted them to the damaging impact of that amendment?
Graham Simpson
The minister has a strange definition of what counts as a U-turn. We were extremely clear that our acceptance of the amendment was about allowing a debate to continue, which is what has happened. During stage 2, I made it clear that there is a great deal of support in my party for devolving more powers to local government. Indeed, during the debate on Mr Wightman’s amendment, I noted that our most recent local government election manifesto was called, “Localism for Growth”.
Derek Mackay
Do the Conservatives really expect us to believe that it is the best use of parliamentary time to support an amendment that was drafted in error and which has been superseded by another amendment that was drafted with other errors, with the result that they have destroyed their business credentials in one day?
Graham Simpson
Dear, oh dear. This is getting ridiculous—absolutely absurd—because what Andy Wightman has achieved is the ability to have that full and proper debate. He has achieved something else, too, because Kate Forbes has actually given ground.
There are three issues. The first is that of reliefs, and Mr Wightman has confessed that his original amendment was drafted in error in that regard—that can happen. Another issue for business is that, as a result of his amendment, we could end up having 32 different rates; the third issue is that rates could be hiked, and it seems that nobody, including the cabinet secretary and Kate Forbes, trusts SNP councils not to increase business rates. Who can blame them?
The letter from the Chartered Institute of Public Finance and Accountancy’s local government directors of finance section that was sent the other day highlighted the complexity of the issue, and Kate Forbes referenced that in her most recent correspondence with MSPs, too. The question for us was whether the proposal was the best way of devolving power to local government, and, as Murdo Fraser has said, we decided that this is not the right time to do it.
On that issue, the Delegated Powers and Law Reform Committee—that bastion of common sense—said:
“It would be inappropriate for subordinate legislation, rather than primary legislation, to devolve rate-setting to local authorities.”
Last week, Kate Forbes wrote to COSLA’s finance lead, Councillor Gail Macgregor, agreeing that a
“proposal that joint work to consider the implications of the devolution of non-domestic rates will be taken forward as part of the wider fiscal framework that we have already committed to delivering.”
She also agreed that that work
“should proceed at a pace that is necessary to bring forward plans for the fiscal framework in time for the next parliamentary session.”
That is a good thing—the minister seems to be on board with this agenda. Given that all parties in the chamber seem to agree with the general principle of devolving powers, that is the right way to proceed.
Andy Wightman should be applauded for getting the issue on to the agenda. Alexander Stewart, Sarah Boyack and I helped him to do so at stage 2, and I am pleased that we did, because it enabled us to have a full and proper debate, which is what this process is all about.
Mike Rumbles
I fully support Andy Wightman’s amendments to devolve non-domestic rates to our 32 local authorities. In doing so, I accept that it will mean that, just as with council tax, we are likely to have different rates in different councils. Otherwise, what would be the point? That is the point that I think is missing.
Kate Forbes
I am curious what the member thinks that would mean for utility companies, such as electricity companies that will be running through 32 different local areas. Will that mean 32 different rates?
Mike Rumbles
It disappoints me to hear that from the front bench of the Scottish Parliament. That is the argument against devolution and against having a Scottish Parliament. It is the argument against devolving power from the UK Government to the Scottish Government. It seems that the Scottish Government does not want to devolve power to our local authorities.
It could not be clearer. If we believe in devolution, as I do and as I thought most MSPs did—we even heard Graham Simpson say that most MSPs did—we have to be judged by our actions. It is not just about the debate; it is about which button we press in a moment. It is about making decisions and making the right ones.
Devolution cannot just stop here at Holyrood. We need to devolve more matters, such as business rates, to our councils. Listening to the counter-argument from the ministerial team on the front bench, I do not believe that they are interested in devolving real power from themselves to our councils at all. That is why it is quite right that MSPs such as Andy Wightman have the courage to do the right thing here. When MSPs do the right things for the right reasons, they should be supported.
We have heard the Cabinet Secretary for Finance and the Constitution, in a jibe at the Conservatives, say, “What about the car park tax—isn’t that devolution?” I am talking about devolution that will be used—real devolution.
As Andy Wightman, whom I commend for bringing this proposal forward, said earlier, the bill is an opportunity to make real change. It is a rare event indeed in the history of how we run our country. I do not accept the argument that we will have change, but not just yet, or that, as Graham Simpson said, this is just about introducing interesting ideas.
I am pleased that the Liberal Democrats are supporting Andy Wightman on this because, as far as devolution is concerned, it is the right thing to do.
The Presiding Officer
I call Andy Wightman to wind up on the group and to press or withdraw amendment 23A.
Andy Wightman
I am genuinely thankful to members for their contributions in the debate. It is not often that we get to stage 3 and have such a meaningful debate about important issues.
I also thank all those who have engaged with me and other members over the past two months. It is true that this debate took many people by surprise; perhaps that is a reflection of the fact that we have a very settled, cosy consensus that whatever the Government says it wants to have in a bill is what Parliament—the body that actually makes law—will eventually say. I hope that it is a wake-up call to some in Scotland‘s civic society that tells them they need to pay more attention to what Parliament and Opposition members think and not just concentrate on what the Government proposes.
Murdo Fraser talked about a more fundamental review, and we will discuss that tomorrow. The original proposition by the Scottish Government, back in 2014, was that there would be a fundamental review, but that is not what we have had. As I believe Willie Rennie pointed out, we have had a very narrow review.
Kate Forbes mentioned evidence from England, which is not often cited by the Government. I would go broader than that. International research that was recently conducted by a Swiss consultancy for the European Association of Municipalities showed not only that the UK is one of the most centralised states in the world but that states with a high degree of decentralisation of policy making, including decentralised fiscal powers, do better economically than those with more centralised decision making. That evidence came from right across Europe.
In voting on amendment 23, the Parliament will have a fundamental decision to make. After 23 years of devolution, we can either recognise that it is time to make Scotland a normal European country—in which the local state would hold the type of power that any European municipality or county will have held for centuries—or we can continue with the centralisation that has plagued this place.
I draw members’ attention to a report from the consultative steering group, which drafted many of the standing orders of the Parliament 20 years ago. The report, which was published last year, as part of the 20th anniversary of this place, says:
“Looking closer to home, we are disappointed that devolution has, if anything, led to a weakening of the position of local government in Scotland. Our expectation was that devolution would set us on a path towards a subsidiarity arrangement for local government. The Scottish Constitutional Convention recommended that the Scotland Act should commit the Scottish Parliament to securing and maintaining a strong and effective system of local government, embodying the principle of subsidiarity ... What we have seen instead with successive governments is a tightening of central control over local budgets and spending priorities. Our view is that the benefits of bringing decision-making back to Edinburgh in 1999 should flow through to proper empowerment of local communities through their local representative bodies.”
That is what the consultative steering group said in its 20th anniversary review of devolution.
I am glad that there is now widespread acceptance and support for the idea of a fiscal framework between the Government and COSLA. Scottish Greens secured the establishment of such a measure in the Government’s budget last year.
Before I conclude, I say that I am aware of the substantial influence that outside bodies, particularly business associations, have in policy making. Scotland is a small country, and I am critical of the cosy relationship that exists here between the Government and business organisations. I also respect the view that COSLA articulated on Friday. I have worked closely with it on many issues in my time in the Parliament.
However, as legislators, sometimes we have to take a stand. It is for the Parliament to decide where such powers should sit and to say that, notwithstanding the concerns, fears and views of those who are outside this place, empowering local government is the right thing to do. We have such powers in our hands today. Let us celebrate 23 years of devolution by addressing the consultative steering group’s criticism and agreeing that local government needs the powers that I now propose. Not only does local government need them; if such powers were to be established, ratepayers would find that returning to local rate setting would lead to a more effective, transparent and engaging process for all involved.
I move amendment 23A.
The Presiding Officer
The question is, that amendment 23A be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Finnie, John (Highlands and Islands) (Green)
Greer, Ross (West Scotland) (Green)
Harvie, Patrick (Glasgow) (Green)
Johnstone, Alison (Lothian) (Green)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Campbell, Aileen (Clydesdale) (SNP)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Corry, Maurice (West Scotland) (Con)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Golden, Maurice (West Scotland) (Con)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harper, Emma (South Scotland) (SNP)
Harris, Alison (Central Scotland) (Con)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lochhead, Richard (Moray) (SNP)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Mason, Tom (North East Scotland) (Con)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wells, Annie (Glasgow) (Con)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Whittle, Brian (South Scotland) (Con)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 10, Against 103, Abstentions 0.
Amendment 23A disagreed to.
The Presiding Officer
I ask Andy Wightman to press or seek to withdraw amendment 23.
Andy Wightman
I press amendment 23.
15:30The Presiding Officer
The question is, that amendment 23 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Finnie, John (Highlands and Islands) (Green)
Greer, Ross (West Scotland) (Green)
Harvie, Patrick (Glasgow) (Green)
Johnstone, Alison (Lothian) (Green)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Campbell, Aileen (Clydesdale) (SNP)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Corry, Maurice (West Scotland) (Con)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Golden, Maurice (West Scotland) (Con)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harper, Emma (South Scotland) (SNP)
Harris, Alison (Central Scotland) (Con)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lochhead, Richard (Moray) (SNP)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Mason, Tom (North East Scotland) (Con)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wells, Annie (Glasgow) (Con)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Whittle, Brian (South Scotland) (Con)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 10, Against 103, Abstentions 0.
Amendment 23 disagreed to.
Amendment 44 moved—[Kate Forbes]—and agreed to.
After section 8C
The Presiding Officer
Group 8 is on setting a progressive rate for non-domestic rates. Amendment 24, in the name of Andy Wightman, is the only amendment in the group.
Andy Wightman
It is generally recognised that progressive taxes are the best kind of taxes—I have heard Mr Mackay and Mr Swinney repeat that ad nauseam in Parliament. A progressive tax is one in which the rate rises as the tax base rises. I know that the Scottish ministers agree with that, but the commitment to progressive taxation is undermined by our two local taxes. The council tax is a regressive tax whereby the rate falls as the tax base increases, and the non-domestic rate is a flat tax.
Amendment 24 provides the framework for the annual rate to be set not at a flat rate of, for example, 49p in the pound, as it has been set for this financial year, but at a progressive rate, with different rates for different bands. The amendment provides that ministers may, by regulations, adjust rates and bands as they see fit, as they do now through bringing before Parliament an order that sets the current rate.
There is not much more to say. At stage 2, I lodged a similar amendment, which was disagreed to, but I am glad to have lodged amendment 24, because I believe in the principle of progressive taxation. If members agree with that principle, I invite them to agree to amendment 24.
I move amendment 24.
Kate Forbes
Amendment 24 is very similar to amendment 14, which was lodged by Andy Wightman at stage 2, except in that the poundage figures have been replaced with the letter “x”, leaving them to be determined later.
We support the principle of improving progressivity in the rates system, which already contains some of the progressivity that Andy Wightman is calling for. The small business bonus scheme protects those who occupy the smallest properties, and the large business supplement applies to those who occupy the largest properties, so elements of progressivity are already structurally built into the current system.
The premise of non-domestic rates is that rateable value is based on the notional rental value of the property, whereas progression or progressivity is linked to the ability to pay. That is why I do not think that amendment 24 would deliver a more progressive system. For example, a prosperous tech company that is based in small premises could pay almost nothing in rates whereas a business that might be making far less money but that occupies much larger premises might have a rates bill that it finds far less affordable.
Andy Wightman
That is a ridiculous argument. Non-domestic rates are a tax on the rental value of a property—the means of the person who occupies it are immaterial. Whether the occupier of a property is rich or poor is dealt with through income tax, corporation tax and so on.
Kate Forbes
I am making the point that, in order to make the system more progressive, we have to consider the ability to pay as well as the rental value of a property. In an increasingly digital economy, I do not think that the size of a building reflects the ability to pay, so a system that is based on property tax can never be as progressive as income tax, for example.
Since stage 2, there have been no calls from the business community or any other stakeholders in support of the change that is set out in Andy Wightman’s amendment 24, so the Government is not in a position to support it.
The Presiding Officer
The question is, that amendment 24 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Finnie, John (Highlands and Islands) (Green)
Greer, Ross (West Scotland) (Green)
Harvie, Patrick (Glasgow) (Green)
Johnstone, Alison (Lothian) (Green)
McDonald, Mark (Aberdeen Donside) (Ind)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Wightman, Andy (Lothian) (Green)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Campbell, Aileen (Clydesdale) (SNP)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Corry, Maurice (West Scotland) (Con)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Golden, Maurice (West Scotland) (Con)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harper, Emma (South Scotland) (SNP)
Harris, Alison (Central Scotland) (Con)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lochhead, Richard (Moray) (SNP)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Mason, Tom (North East Scotland) (Con)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wells, Annie (Glasgow) (Con)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Whittle, Brian (South Scotland) (Con)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 7, Against 104, Abstentions 0.
Amendment 24 disagreed to.
Before Section 9
The Presiding Officer
Group 9 is on the mandatory minimum payment of non-domestic rates. Amendment 25, in the name of Andy Wightman, is the only amendment in the group.
Andy Wightman
The annexes to the Barclay review include a number of issues that the review looked at, but on which it did not make formal recommendations. Annex C.7 is entitled, “Ensuring that every ratepayer pays something.”
The principle is a straightforward one of accountability. The Barclay review mentioned “rates deserts”, which are areas of the country—typically, small towns—where nobody occupying non-domestic property, whether owners or non-owners, contributes anything to the cost of running and delivering the public services that they depend on.
That situation is particularly acute in Edinburgh. My research on short-term letting in the city shows that £6 million is claimed through the small business bonus scheme by the owners of short-term lets. I think that that is wrong. Many of those companies are in offshore tax havens and are perfectly capable of making a contribution to the local tax base.
What makes it worse is that the small business bonus scheme is not just a relief to small businesses—which, you could argue, is a good thing—but is paid for out of general taxation. The poorest 20 per cent of society pay a higher proportion of their income in taxes than the richest 20 per cent pay. Everyone who benefits from those reliefs is benefiting from the contribution of the general taxpayer.
We need to address that important economic argument, which I hope will be done as part of the review of the small business bonus scheme. Nevertheless, all non-domestic properties depend on public services, including the roads by which their customers reach them and on which they make deliveries; on the amenities that enhance property values; and on the planning and infrastructure that enable the workers to get to work and to have housing.
The principle that everyone should pay something—albeit a modest amount—is very important in building the link between non-domestic property occupiers and the councils that provide the services on which they rely.
Relief-seeking schemes, such as the small business bonus scheme, are separate to all that. However, if their effect is to take thousands of people out of the system so that they pay nothing whatsoever, that will begin to—it has begun to—undermine the important relationship of accountability between non-domestic property occupiers and local authorities that has existed for well over a century.
Amendment 25 provides that every ratepayer pays a specified minimum amount, which it establishes as 2.5 per cent of the valuation before reliefs. It also provides that the Scottish ministers may amend that at any time by regulation.
I lodged the amendment at stage 2, when it was defeated. The principle is extremely important, however, and I am delighted to have had the Presiding Officer’s permission to lodge the amendment again at stage 3. I invite members to support this straightforward amendment and the principle embodied in it.
I move amendment 25.
Murdo Fraser
Amendment 25 provides for a mandatory minimum payment of at least 2.5 per cent of the valuation. I understand the principle that Andy Wightman is applying: everyone should pay something by means of taxation. However, small businesses throughout Scotland have benefited from the small business bonus scheme. If the amendment is agreed to, many thousands of small businesses—many of which are already struggling—would be asked to pay a tax that is currently not being levied. I do not think that they would thank us for that.
Andy Wightman
To be clear, the amendment does not ask beneficiaries of the small business bonus scheme to pay a tax that they would not otherwise pay. Rather, it establishes a payment of 2.5 per cent of the rateable value: someone who occupies a property with a rateable value of £10,000 is asked to pay £250 as a symbolic gesture to recognise the fact that their business, no matter how small, is dependent on the services that local government provides.
Murdo Fraser
I thank Mr Wightman for that intervention. He still makes the case that all businesses would be asked to pay something, which means that people who currently do not pay would be asked to do so. If they were asked to pay £250, would the administrative cost of collecting that sum outweigh the value of the payment to local authorities? I do not want to support a bill that increases the tax burden on small businesses.
As Mr Wightman knows, the Fraser of Allander institute is conducting an on-going review of the small business bonus scheme, the outcome of which is pre-empted by amendment 25. The kindest thing that I can say about amendment 25 is that it is premature. It is inappropriate and I regret that I have to oppose it.
Kate Forbes
Mr Wightman is right to say that not all properties pay business rates: in Scotland, 143,000 properties do not pay those rates. The small business bonus scheme is the main—although not the only—reason for that, as the scheme provides 100 per cent relief to just over 110,000 properties in Scotland and the remaining 33,000 properties that do not pay rates do so as a result of other rate reliefs.
Comments about the independent review have already been made. I said at stage 2 that the Fraser of Allander institute is carrying out an independent review of the small business bonus scheme. I accept that improvements can and will be made to the scheme to ensure that it best supports small businesses and local economies. I expect to receive the review report in the summer and consider it prudent to await the review’s recommendations, rather than consider the imposition of a minimum rates liability on the properties that currently benefit from the scheme.
The Scottish Government has introduced a number of targeted 100 per cent reliefs over the years, where we have considered that, for example, such relief might encourage investment in the property stock—the business growth accelerator relief is an example. To encourage improvements in digital connectivity, which all parties support, the Government introduced 100 per cent relief for telecommunications masts. Those are targeted reliefs for a purpose; investments in those areas require stability and I do not intend to change those reliefs at this time, so I do not support the amendment.
Andy Wightman
Amendment 25 is not related to relief schemes. The review of the small business bonus scheme is welcome and I agree with the minister that we look forward to the results of the Fraser of Allander review. The amendment is about the principle that everyone should pay something. Murdo Fraser made a point about administrative costs. There are already such costs in the small business bonus scheme system: people have to apply for the relief; the application has to be processed by rating authorities; and the sum then needs to be compensated by the Scottish Government out of general taxation. The only change is that the bills would be slightly adjusted. I wanted to correct that point.
I understand that members are not keen on the amendment and I will not detain them any further in trying to persuade them otherwise. Notwithstanding, I will press amendment 25.
The Presiding Officer
The question is, that amendment 25 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Finnie, John (Highlands and Islands) (Green)
Greer, Ross (West Scotland) (Green)
Harvie, Patrick (Glasgow) (Green)
Johnstone, Alison (Lothian) (Green)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Wightman, Andy (Lothian) (Green)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Campbell, Aileen (Clydesdale) (SNP)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Corry, Maurice (West Scotland) (Con)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Golden, Maurice (West Scotland) (Con)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harper, Emma (South Scotland) (SNP)
Harris, Alison (Central Scotland) (Con)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lochhead, Richard (Moray) (SNP)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Mason, Tom (North East Scotland) (Con)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wells, Annie (Glasgow) (Con)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Whittle, Brian (South Scotland) (Con)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 6, Against 107, Abstentions 0.
Amendment 25 disagreed to.
Section 9—New or improved properties: rates relief
Amendment 7 moved—[Alexander Stewart].
15:45The Presiding Officer
The question is, that amendment 7 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Macdonald, Lewis (North East Scotland) (Lab)
Marra, Jenny (North East Scotland) (Lab)
Mason, Tom (North East Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 53, Against 59, Abstentions 0.
Amendment 7 disagreed to.
Amendment 6 moved—[Alexander Stewart].
The Presiding Officer
The question is, that amendment 6 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 35, Against 77, Abstentions 0.
Amendment 6 disagreed to.
Amendment 45 moved—[Alexander Stewart]—and agreed to.
Section 9A—Contribution to net-zero emissions target: rates relief
The Presiding Officer
Amendment 46, in the name of Sarah Boyack, is grouped with amendments 47 to 50.
Sarah Boyack
These amendments restructure section 9A, which was created by an amendment that I lodged at stage 2. If we, as a Parliament, are committed to tackling the climate crisis that we have recognised, it is vital that steps to mitigate our carbon footprint are taken at every opportunity. Section 9A ensures that, if an organisation chooses to implement a district heating network, its rates bill will not skyrocket and there will be eligibility for relief.
While researching the issue for stage 2 discussions, I became aware of concerns that NDRs were one of the major obstacles to local authorities developing new heat networks. Glasgow SNP councillor Anna Richardson said that
“the way district heating systems are treated in the local tax system acts as a deterrent to them ... more widely.”
Her council officials commented that the current system also prevents a move to municipal energy firms, which is the opposite of what we all want to achieve. We need leadership from our local authorities. We need community and co-operative projects that produce low-carbon heat infrastructure, to enable long-term paybacks to local communities and, crucially, to produce affordable heat. At the moment, the NDR system makes that impossible.
If we are to reach our carbon targets by the 2030 deadline, it is imperative that we get going now. My amendment 46 looks at heat networks. The Scottish Government is already looking at progress on expanding and mapping heat networks. Legislation with regard to the consumer aspects will be coming to the Parliament. UK-wide, it is estimated that, in order to meet our carbon targets, we will have to deliver 18 per cent of heat from heat networks by 2050. The bill aims to think about the future and to facilitate the necessary investment to allow for that.
The amendments also ensure that the bill is future proofed. I have just been talking about district heating networks, but they are only one example of the type of scheme that ought to be granted relief. If we agree to amendments 46 to 50, we will leave space for future technological developments, which the Scottish Government could support through reliefs.
I thank officials from both the Scottish Parliament and the Scottish Government for their support in drafting the amendments, which are much improved on the amendments that I lodged at stage 2—getting it right at stage 3 is crucial. I hope that colleagues will feel able to support all the amendments in the group.
I move amendment 46.
Beatrice Wishart (Shetland Islands) (LD)
I am grateful for the efforts that were made in committee to insert section 9A into the bill.
In recent weeks, I have had meetings with Shetland Heat Energy and Power—or SHEAP, as it is known—which runs a big district heating scheme around Lerwick. At the last revaluation, it saw its rates bill rise by 463 per cent. SHEAP is not compensated for that increase by the relief scheme that is currently in force for district heating, and it is not difficult to see why it considers that it is being penalised for its innovation over the past 20 years in providing a cost-effective, low-carbon and low-emission solution for the disposal of the residual waste of Shetland and Orkney.
I hope that the amendment not only gives ministers more powers to act in support of people who do their best to tackle climate change but also indicates to ministers that we want action. SHEAP should not face such a big increase in its bill. I want ministers to use the powers that they will have under the bill, or to use the powers that they already have, to get a fairer deal for district heating in Shetland and further afield.
I welcome the helpful tidying up that amendments 46 to 50 attempt.
Kate Forbes
I have little to say other than that I welcome the amendments. Essentially, they are technical amendments that address minor drafting issues in section 9A. They will result in better legislation and will improve the power to address the important issues that Sarah Boyack has highlighted.
The Presiding Officer
I call Sarah Boyack to wind up and to press or seek to withdraw amendment 46.
Sarah Boyack
I thank Beatrice Wishart for supporting amendment 46 and for giving excellent examples of why we need it on the ground. It is about leadership. Local authorities need to be able to get going, as do community co-operatives. It would be a practical way in which to start tackling our climate targets.
I thank the minister for her support, and I hope that colleagues will agree to the amendments in the group.
Amendment 46 agreed to.
Amendments 47 to 50 moved—[Sarah Boyack]—and agreed to.
The Presiding Officer
Members will be delighted to hear that we are well ahead of schedule. We will have a short comfort break, to allow members to have a cup of coffee or tea. We will resume at 5 past 4, in 12 minutes’ time.
15:53 Meeting suspended.16:08
On resuming—
Beatrice Wishart
On a point of order, Presiding Officer. I apologise, because when I spoke about the district heating scheme I should have declared that I have a family member who works for the Shetland district heating scheme.
The Presiding Officer
Thank you very much. That point is noted.
Section 9B—Eligibility of certain public schools for rates relief
The Presiding Officer
Group 11 is on rates relief for independent and certain public schools. Amendment 51, in the name of the minister, is grouped with amendments 52, 53, 16 and 15.
Kate Forbes
I acknowledge that there are different views in the chamber and outside of it about the amendments and about the provision. The Tories, in particular, have been very clear that they do not support removal of relief for independent schools. We have covered the arguments in depth at stage 1, stage 2 and in correspondence and conversations. The Scottish Government has been committed to implementing the recommendations of the independent Barclay review to deliver a level playing field between state and independent schools. That is what we are doing.
I move to the amendments. Amendment 51 deals with rates relief in relation to centres of musical excellence in public schools. It will remove section 9B—which would not, in practice, have provided relief to any public state schools—and replace with it with a more effective provision.
Amendments 52 and 53 give ministers power to make regulations that will be subject to affirmative procedure, to reinstate charitable relief for independent schools by creating further exemptions, alongside the exception for music schools and special schools. I do not think that such a power is needed—not because it is a bad power, but because the Scottish Government already has powers in that area.
Amendments 16 and 15 reflect the difference of opinion and position between the Scottish Government and the Conservatives, which I set out at the beginning of my remarks. The Scottish Government will therefore not support the amendments.
I move amendment 51.
Andy Wightman
I thank the minister for the work that her Government has done to improve the provision that was introduced by me at stage 2 and which forms section 9B of the bill. There is only one school in the independent sector that provides education for pupils who are selected on the basis of musical ability, but there are four public schools, or parts of them, that provide exactly the same service: namely, the music school at Douglas academy in East Dunbartonshire; the City of Edinburgh music school, at Broughton high school in Edinburgh; Aberdeen city music school, at Dyce academy in Aberdeen; and the national centre of excellence in traditional music at Plockton high school, with which the minister will no doubt be very familiar.
I thank her for working on and improving section 9B. The purpose of section 9B was, first, to ensure that if an independent music school was going to be relieved from the provisions of section 10, so, too, should public music schools.
Amendments 52 and 53 would give the Scottish ministers powers to extend rates relief to other schools if they saw fit to do so. I note from the minister’s opening remarks that she considers that the Government already has those powers. If that is genuinely the position, I am happy not to move the amendments, but I would be grateful if the minister could make that clear on the record when she winds up.
The amendments were stimulated by representations that were made to me by a religious institution that provides independent school education and charges fees that are substantially lower than the cost of providing the education service. The school was very keen for me to lodge amendments that would deal specifically with it, but there was no way that I was going to do that, because its amendments were poorly drafted. I do not make any judgment as to whether that particular school should receive relief—I do not have a view on that—but it was my view that there should be a provision that would allow for the possibility that a good case might be made by that school, or any school, and that legislation should therefore make provision for that without having to wait for further primary legislation.
However, as I indicated a moment ago, the minister has intimated that she already has that power. I look forward to her clarification on that, which will influence how we vote on my amendments. We support amendment 51.
Liz Smith (Mid Scotland and Fife) (Con)
I speak to amendment 16, which is in my name. The minister, and indeed the whole Parliament, are extremely well aware of why the independent schools sector is so strongly opposed to section 10, and why its schools feel so badly let down by the lack of meaningful engagement from the Scottish Government, not just during the passage of the bill, but for the past two years.
The minister was at great pains to say earlier that it was important to listen to stakeholders, and she more or less accused the Scottish Conservatives of coming to that late in the day when it came to the business sector. May I turn the tables on the minister and say that if she had been listening to the independent schools sector, she would know exactly what it is that we are talking about when it comes to listening to stakeholders? In particular, those schools do not understand why an accurate and comprehensive cost benefit analysis of the policy proposal has not been carried out—one that would properly assess the financial implications of the policy, not just for the independent sector but for the state sector, and accurately assess equity in education.
The minister has publicly said three times during the passage of the bill that she values the high standard of education that is provided by the independent sector, and that she recognises that it is an important part of Scotland’s education system. She also appears to acknowledge that there was unanimous Parliamentary support for the measures that were adopted by the Parliament in 2005, when the future of the independent sector was rightly under intense scrutiny. It is doubly surprising that there has been no attempt to adopt any part of that consensus in the bill.
It is also surprising that no effort has been made to address the concerns of the Office of the Scottish Charity Regulator, which stated clearly that the policy will, in effect, create two channels of charity, which I am sure will pose considerable problems for the Scottish Government in the near future.
The minister knows full well that fees in the independent sector will, without exception, rise, thereby increasing the likelihood that more parents will be unable to choose independent education. Some of the smaller independent schools will now be at a tipping point when it comes to their future survival. They will be less able to offer generous bursary support and the policy will have a detrimental impact on the ability of those schools to offer their facilities for public benefit at discounted rates and on local economies, including in my part of my Mid Scotland and Fife region.
However, what is worse is that independent education will become more elitist and parental choice will be reduced, which is the direct opposite of what the Parliament concluded in 2005, and of the stated aims of Scottish Government education policy. As well as that, the proposed policy move will have significant implications for the state sector—that should not be forgotten—in relation to financial considerations. It is difficult enough for the state sector in respect of availability and teaching resources, which are under considerable strain.
The policy will be deeply damaging to one of the most successful parts of Scottish education, which is why section 10 should not be part of the bill.
Graham Simpson
I do not want to go over the ground that Liz Smith has already ably covered. OSCR raised real concerns over the issue at stages 1 and 2. OSCR’s argument was—and it was correct—that it is not right to treat one section of the charitable sector differently from the rest.
John Mason (Glasgow Shettleston) (SNP)
I thank the member for giving way. He made the same point that Liz Smith made. Does he accept that the charities sector has developed way out of line with where it was in the past? We now have arm’s-length external organisations and all sorts of things being called charities. Does he agree that we need to look at charities and that there are different kinds of charities?
Graham Simpson
If John Mason thinks that, he should support amendment 15, which says that there should be a review of all charitable reliefs. I look forward to his support.
As I said, OSCR’s point—and it is the regulator—was that it is not right to treat one part of the charity sector differently from the rest. It is not right; it is fundamentally unfair; and it is an attack on one part of the sector. That is all that it is—an attack, and one that, as Liz Smith said, could lead to some schools closing. I have in my mind the names of some of those schools—I will not say which ones I think may be at risk. The minister said that she does not want schools to close, but she has refused to budge an inch on the issue, so on her head be it. If one of those schools closes, it is down to Kate Forbes—it is as simple as that.
Amendment 15 is the right approach—I hope that it is the right approach for John Mason as well. It is also the fair approach, but being right and fair will not, I fear, win the day.
The Presiding Officer
Eight members have indicated that they wish to speak. I hope that we will get through everybody.
Sarah Boyack
We support the principle of applying non-domestic rates to private schools. All state schools currently pay non-domestic rates, so there is an issue of fairness. We certainly do not support Conservative proposal to delete section 10 in its entirety.
We had a lengthy set of discussions on the issue at stage 2. Conservative colleagues suggested that the provisions should be scrapped or delayed, but it is clear that private schools have known for some time that the Scottish Government was going to legislate to bring them into line with state schools.
We debated the issue of music schools, which Andy Wightman alluded to, and I think that we got to the right place in the bill.
The key thing is how we go forward from here. Section 10 is a key part of the bill and it will have financial implications. There will be an upside, because new money will come to local authorities as a result.
Murdo Fraser
I wish to speak briefly in support of amendment 16, in the name of Liz Smith, and amendment 52, in the name of Andy Wightman. Along with the proposals to localise rates, the ending of rates relief for independent charitable schools is the most contentious part of the bill.
On Sarah Boyack’s point about fairness, she is right that state schools pay rates, but of course that is simply an accounting exercise, with public money going round in a circle. There is no additional burden on the parents of pupils at state schools as a result. If I may say so, that argument is a bit of a red herring.
As we have heard, the Office of the Scottish Charity Regulator has been very clear in its opposition to the proposal to change the tax treatment of independent schools. In evidence to the Local Government and Communities Committee, it said that it has
“a long-held general concern that treating any group of charities in a differentiated way for tax or other purposes, as proposed by the Barclay Review and now the Bill, introduces the potential for confusion in the minds of the public as to what it means to be a charity.”
That, to me, goes to the heart of the issue. OSCR also pointed out that a number of independent schools are in a marginal financial position.
The bill amounts to a tax grab of £7 million a year from independent schools. It is inconceivable that a tax hike of that nature will not have an impact on local economies in the areas where independent schools exist, among them Perth and Kinross. It has a large number of independent schools, and their spend supports local businesses in towns such as Crieff. The same could be said of Dollar, in Clackmannanshire. Local tradespeople and other small businesses benefit from the existence of independent schools, which are large local employers. Any additional charges on a sector that is already under financial pressure will have a knock-on impact.
Moreover, as Liz Smith pointed out, independent schools may be able pay the additional rates bills only by increasing fees to parents or cutting bursaries, which is bound to have an impact on the number of parents who can choose to send their children to those schools and will put an additional burden on local authorities. However, there is absolutely no assessment in the bill or the financial memorandum of the additional financial cost to local councils such as Perth and Kinross should pupils transfer from the independent sector to the local authority sector.
As Andy Wightman pointed out, there is a particular issue for small independent faith schools, which charge very low fees and are subsidised by donations. They will be hit by a disproportionate additional levy and might well have their future threatened by the bill.
The measure has not been properly thought through, there is no independent justification for it, and it will damage local economies. For those reasons, I support Liz Smith’s amendment 16.
Willie Rennie
I will speak to amendment 16. I am not convinced by the argument about a level playing field. The non-domestic rates that are paid by council-run schools are already in a circle of funding. Any money that the council notionally pays in non-domestic rates is circulated back through grant allocations. Indeed, section 8C, if we had agreed to leave it in the bill, would have made that even clearer.
The level playing field argument does not really work. In fact, the provisions on independent schools create a new disparity in the charitable sector. My colleagues can look back to a previous session, in which the Parliament decided that decisions on charitable status should be made by OSCR, which was set up to do that. We are not in favour of the Parliament now deciding to second-guess OSCR, so we support amendment 16.
Peter Chapman (North East Scotland) (Con)
I am very concerned about the proposal in section 10 to remove charitable rates relief from independent schools, and I support amendment 16, in the name of Liz Smith.
One school in Balmedie in my region has a strong Christian ethos in order to meet the requirements of parents from the Plymouth Brethren Christian church—there is a strong Brethren community in the north-east. The school has unique characteristics and is only registered as an independent school due to its inability to secure regular funding as a registered state school. It is a school with exceptional circumstances, but under the bill exceptional circumstances are restricted to music schools. In practice, only one school that I am aware of is covered.
Like the Conservative group, Christian groups would prefer section 10 to be entirely rejected. If it is not, we urge all members to support amendment 52, which would give the opportunity for a proper case to made to ministers to give rates relief to all schools with exceptional circumstances.
Maurice Golden (West Scotland) (Con)
Sir William Wallace, Sir George Mackenzie, Viscount Duncan of Camperdown, Sir David Baxter, D C Thomson, Mary Lily Walker, Brian Taylor, Andrew Marr, K T Tunstall, Martel Maxwell, Neil Forsyth, Ali Dickinson and Eilish McColgan are all former pupils of the High school of Dundee—as am I.
We do not know how many of those famous alumni received bursaries and support in order to achieve their education and subsequent notoriety, and nor should we. However, we do know that the SNP Government is using non-domestic rates as a cheap populist tool to attack independent schools. That will threaten bursary support for the current and future generation of both famous and non-famous alumni to achieve all that they can.
Every year, the High school of Dundee provides £1 million per annum in bursary support, with 114 bursaries having been provided up to 31 July 2019.
Mark McDonald (Aberdeen Donside) (Ind)
Can Maurice Golden highlight whether any famous people have come through the state school sector? What evidence does he have that any of the people that he mentioned would not have achieved what they did by coming through the state school sector, as opposed to the independent sector?
Maurice Golden
We know that the independent sector has a track record of maximising educational and career attainment. We know that the SNP has continually failed in the education system and does so increasingly as, under its Government, Scottish education tumbles down the league table.
The facilities that are offered by the High school of Dundee are open to 2000 members of the local community, which uses the school facilities every week. It beggars belief that the SNP is willing to target independent schools in such a callous manner.
I urge members to support amendment 16 in the name of Liz Smith.
Jamie Greene (West Scotland) (Con)
To answer Mr McDonald, went to St Stephen’s high school in Port Glasgow, which was a good state school. However, I am not here to talk about state schools, but about this issue. It is clearly a heated debate, but it is also an important one, because, at the heart of it are students and pupils.
I draw members’ attention to a very good school in my region—St Columba’s in Kilmacolm. It has 700 pupils and behind every single one is a local family. Behind every school there are workers, teachers, staff and contractors who work in the schools’ communities. Those schools are at the heart not only of the towns, but of the regions in which they sit. St Columba’s works on behalf of the region of Renfrewshire and Inverclyde, parts of which are represented by members who are here.
If there had been a sensible and rational explanation for the proposal, there would have been far more engagement on it. I am afraid that the levels of consultation were dismal.
The problem that many parents who are listening to the debate have is that although they accept—as I do—that one could have a philosophical debate about the notion of independent schools, using rates-relief change as a proxy to make a political point against them is an inappropriate use of the bill.
16:30Derek Mackay
Is Jamie Greene aware that the proposal came from Ken Barclay? Therefore, it is not a political attack; it is a fair recommendation on fairness that came from the Barclay review. As good as Kate Forbes is, it was not her idea; it was Ken Barclay’s idea, so maybe we should lay off the “political attack” line.
Jamie Greene
That was an absurd intervention. On the idea that ministers simply do what they are told and do not need to consult people, we are discussing a bill that is going through Parliament, and we have every right to consult stakeholders. The stakeholders whom the bill will affect are parents and their children who are the pupils who attend the schools.
As I have said, I do not really care whether members have an ideological position for or against independent schools. However, I ask them to think about something. If they have an independent school that is doing a good job in their constituency or region, they should simply think about the consequence of their vote today. Some £37 million will have to be found over the next five years, and that money will have to come from somewhere. Many of those schools share their facilities—sports, music and outdoor facilities—with local communities and local state schools. I do not want any of those facilities or that good work and the integration into the community to be lost in any way as a consequence of action that is taken today.
All that I ask members to do is think about it. If they have a good high-quality independent school in their region or constituency, they should have a think about how they will vote today. They should not make a political point based on the premise of independent schools, but should vote according to what the bill will do.
That is why I support Liz Smith’s amendment 16. If members will not support her amendment, Andy Wightman’s proposal to at least allow future discussions about who can be exempt is an excellent compromise that they should consider.
Alexander Stewart
I speak in support of amendment 16.
One of the most concerning measures in the bill is the removal of charitable rate relief for independent schools, which is currently afforded to the sector. l pay tribute to everybody who has spoken so far in support of Liz Smith.
Some people have an ideological aversion to any private sector involvement in schooling, but we have to accept that independent schools play a major role in the Scottish education system. They teach about 4 per cent of pupils in Scotland, and many of them struggle to meet their day-to-day costs. Changes in the bill could necessitate fees increases, cuts to bursaries or even closures. That, in turn, would mean more pupils needing to be educated in the state sector, which could, in theory, mean a greater burden on the taxpayer than any increase in business rate income would be.
Others from my region have said that schools such as Dollar academy in Clackmannanshire, Glenalmond college, Kilgrastron school, Strathallan school and Morrison’s academy in Perthshire not only benefit the pupils who attend them, but have a significant positive impact in their communities. They all have close links with state schools in their areas, and they can provide support on issues of which the state sector has limited experience. They support employment directly and indirectly, and ensure that businesses can thrive in communities.
We have already heard about closures in highland Perthshire, and we have heard about the closure of Beaconhurst school in Bridge of Allan not long ago. Those closures had a massive impact on the local economy.
It is difficult to assume that the proposed withdrawal of relief from independent schools is anything more than a direct political attack on the sector and on the parents who choose to exercise their parental choice by sending their children to them, without people a thought being given to the consequences and the wider effects that the change might have. I therefore support maintaining charitable relief, and I urge members to support amendment 16, in the name of Liz Smith.
Jeremy Balfour (Lothian) (Con)
I rise to speak as a regional member for Edinburgh, because the development will perhaps impact on that city more than any other part of Scotland.
Members may be aware that, in Edinburgh, one in four children—25 per cent of them—goes to a private school at secondary level. A substantial number of children also go to private primary schools in Edinburgh. Within the council sector, our school estate is already bursting at the seams. Boroughmuir high school, James Gillespie’s high school, the Royal high school and others across Edinburgh are already at capacity. Boroughmuir is looking forward, given the number of children who will go to that school in the next two or three years, to having to build a second new school.
If we remove any children at all from the private sector, they will have to be accommodated within City of Edinburgh Council schools. That is not going to be possible without a massive programme of new building on land that is simply not available. The cabinet secretary and the minister are laughing as I speak, but this is a massive issue for people in Edinburgh.
Not everyone who sends their children to a private school can afford an increase in school fees. I know from talking to parents at my girls’ primary school, who were perhaps thinking at primary 6, primary 7 or secondary 1 of sending them to private schools, that that will no longer be possible because they cannot afford to do it.
Can the minster tell us where those children will be accommodated in Edinburgh? If parents have to take their kids out of private schools, particularly at primary level, where will they be accommodated in Edinburgh in the next two or three years? There is simply no room. I fear, if we support the Government’s amendment today along with what is already in the bill, that we will end up with the City of Edinburgh Council not being able to educate every child in the city, or with parents having to take their children out of catchment and across the city to other schools. That would be unacceptable.
I do not believe that Government has thought the matter through, especially for Edinburgh. If members do not support my colleague Liz Smith’s amendment 16, I urge them to support Andy Wightman’s amendment 52, so that we can think about the matter quickly and see what the consequences will be for Edinburgh and other parts of Scotland.
Maurice Corry (West Scotland) (Con)
I support Liz Smith’s amendment 16. In Helensburgh, in my region, we have a school called Lomond school. It supports the children of parents who serve in Her Majesty’s Naval Base Clyde and in our UK submarine fleet. They are away on deployment for weeks or more at a time, and their children find stability in Lomond school, as boarders or otherwise. It would be a gross mistake to penalise them. I met the school’s board and headteacher, who are very concerned that some children might have to be pulled out. There is no room to put them in other local schools—certainly not at primary level.
I ask the Government and the minister to look very carefully at the damaging effect it will have if this penalty is imposed on the independent sector. I support Liz Smith’s amendment 16.
Neil Findlay (Lothian) (Lab)
I have been listening to the debate with great interest. I am not sure whether all those who have taken part have properly declared an interest or said whether they, themselves, or members of their families have benefited from some of the things that we have discussed. I am sure that the Presiding Officer will encourage members to correct the Official Report by declaring their registered interests.
The Presiding Officer
The member will know that it is up to individual members to make that judgment.
Liam Kerr (North East Scotland) (Con)
I, too, support amendment 16, in the name of Liz Smith. I declare an interest in that I benefited from an education at George Watson’s college and at Trinity academy in Newhaven. My daughter is currently at an independent school in Aberdeen.
The key point is that the practical impact of the change that is proposed will be that normal people will be priced out of the sector and their children will be pushed into the state sector. If elitism is the concern, I say that that is exactly what will be achieved by the proposal—it will make the sector an elitist one.
Kenneth Gibson (Cunninghame North) (SNP)
I think that we have all listened to your nonsense for long enough. I thank you for taking an intervention, but how come you do not seem particularly bothered about the £9,250 a year university tuition fees that your Government in Westminster charges people in England but you are concerned about the 1.8 per cent increase in fees that the proposal would cost?
Incidentally, last year, teachers’ pay rises and pension changes resulted in a 6 per cent increase in costs in the sector, and I did not hear you say anything about that. With a 1.8 per cent change, suddenly the world is coming to an end.
The Presiding Officer
I encourage members to make their remarks through the chair.
Liam Kerr
I say to Mr Gibson that we are not in England. [Interruption.] It is shameful. It would be useful if people engaged with the debate.
I want to talk about Aberdeen. If we price people out of the independent sector, we will push them into the state sector in the city, which is short of resources and teachers and has ageing assets. I say to Mr Findlay that I will declare this interest: my wife is a teacher in one of those schools, so I know what I am talking about. The proposal will push children into that sector, and who will suffer? Those very children—the children who have come out of the sector and the children who are going into the sector.
Mark McDonald
Will the member take an intervention?
Liam Kerr
No.
This is a politically driven move, and the people who will be most affected are our children. That is simply wrong.
Mark McDonald
I was not going to enter the debate, but, since Mr Kerr would not take my intervention, I will do so. How dare he make those slurs against the state school sector in Aberdeen? How dare he make those claims? I declare an interest in that I went through the state school sector in Aberdeen and my children are both in state schools in Aberdeen. How dare Mr Kerr suggest that the children in state schools in Aberdeen are somehow receiving a deficient education as a result of the issues that he highlights—
Liam Kerr
Will the member take an intervention?
Mark McDonald
Not a chance.
How dare he suggest that children who are currently in independent schools—
Liam Kerr
On a point of order, Presiding Officer. The assertion that has been made by the member about what I just said is blatantly and demonstrably false, and I do not think that it should be allowed to stand. He should retract it immediately.
The Presiding Officer
As Mr Kerr knows, that is not a point of order; it is just a point. However, the point has been made.
Mark McDonald
We all heard Mr Kerr state that children who are currently being educated in independent schools would suffer were they to move into the state sector in Aberdeen, thereby implying that the state sector in Aberdeen is somehow providing an education that is of a lower quality than that which is being provided in independent schools. It may be that Mr Kerr did not mean to say those things. If so, perhaps he should not have said them, in which case, that slur would not have been made.
I have constituents who are being educated in those schools and others who are working—and doing a fine job—in those schools. It is entirely out of order for the Conservative Party to throw such smears simply to make a political point.
The Presiding Officer
I call Gordon Lindhurst, to be followed by Margaret Mitchell.
Members: Oh!
Gordon Lindhurst (Lothian) (Con)
Oh—yes. [Interruption.]
The Presiding Officer
Order. Let us hear Mr Lindhurst.
Gordon Lindhurst
As someone who has only ever attended state schools, at any level, I say that it is important that SNP members should for once think about outcomes rather than political point scoring. The point that was made by Jeremy Balfour and Liam Kerr was this: the more people who have to go to state schools because there is no possibility of independent education, the fewer resources there are for people like me, who only ever went to state schools.
It is important that people focus on the outcomes, for a change. I know that the SNP Government does not like doing that, but that is what we are talking about. We are not talking about scoring silly political points.
Margaret Mitchell (Central Scotland) (Con)
I support Liz Smith’s amendment 16. To answer Mr Findlay, I attended Coatbridge high school, as did Fulton MacGregor, although we were quite a number of years apart. It is a comprehensive school.
I fully recognise the value of independent schools. They should not be a political football. We are talking about children’s future. We are in danger of passing an amendment that will make it so that only the very wealthy can benefit from going to independent schools. The decision about their charity status should be left to OSCR, and should not become a subject of political dogma or entrenched views.
16:45The Presiding Officer
I call the minister to wind up on the group.
Kate Forbes
On Andy Wightman’s question about whether his amendments duplicate powers that the Government already has, section 153 of the Local Government etc (Scotland) Act 1994 lets ministers make regulations to provide any form of relief scheme that we design. Theoretically, the Scottish Government could design a relief for specific types of schools, such as those that he has in mind.
Read that as my support for the substance of the amendment, but we already have those powers through section 153.
Neil Findlay
I appreciate that the minister is responding for the Government, but I am surprised that the Cabinet Secretary for Education and Skills has not intervened to tell us his view.
Kate Forbes
It is the Government’s view.
The other point is around small schools. Some small schools might well be eligible for the small business bonus scheme.
I do not have much to add. This is clearly an emotive subject. The Government has made its position clear and the Conservatives, through however many of their members spoke, have made their position clear as well.
Amendment 51 agreed to.
Section 10—Charitable relief: independent schools
Amendment 52 moved—[Andy Wightman].
The Presiding Officer
The question is, that amendment 52 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 36, Against 75, Abstentions 0.
Amendment 52 disagreed to.
Amendment 53 not moved.
Amendment 16 moved—[Liz Smith].
The Presiding Officer
The question is, that amendment 16 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 30, Against 81, Abstentions 0.
Amendment 16 disagreed to.
Section 12—Non-use or underuse of lands and heritages: notification
Amendment 54 moved—[Kate Forbes]—and agreed to.
After section 13B
The Presiding Officer
Group 12 is on the duty to report on the number of assessors and on the availability of resources. Amendment 56, in the name of Sarah Boyack, is the only amendment in the group.
Sarah Boyack
Amendment 56 is a response to recommendation 12 of the Barclay review’s report, which stated:
“Assessors should provide more transparency and consistency of approach. If this is not achieved voluntarily, a new Scotland wide Statutory Body should be created which would be accountable to Ministers.”
Picking up on that, amendment 56 is designed to achieve a level of transparency while ensuring that assessors remain independent of political interference. It intends to achieve that by requiring valuation boards or valuation authorities to lay before the Parliament reports on the resource that is available to assessors in terms of both finances and the numbers of qualified staff, and whether that resource is adequate for them to carry out their jobs.
I have spoken to representatives of the assessors, to whom I was very keen to make it clear that the amendment is designed to enable parliamentary transparency. I made the point that it is absolutely not intended to compromise their independence. The reports that would be expected from the relevant bodies would very much be factual. The intention is to ensure that the Parliament would be made aware of any challenges that the sector faces and to bring an understanding of how the legislation works in practice. At the same time, it would provide the relevant committee with the opportunity to make the Parliament aware of how legislative changes that have been made through the bill have impacted on assessors’ abilities to carry out their duties—for example, whether the bill’s measures to reduce appeals have been effective.
I hope that members will support amendment 56, which would increase transparency, strengthen the bill and implement the recommendation in the Barclay review’s report.
Finally, I thank Scottish Government officials for their assistance in getting the detailed drafting of the amendment right so that members can be confident in supporting it, which I hope that they will do.
I move amendment 56.
Willie Rennie
Amendment 56 could be important, as the bill intends that we will revalue more frequently. Businesses are frustrated by the lengthy appeals process that exists under the current arrangements. I want to hear from people who are regularly involved in such appeals, to ensure that they have the resources that they need to carry out valuations, reviews and appeals in a timely way that supports business.
Kate Forbes
I welcome Sarah Boyack’s amendment 56, which I support. At stage 2, I considered that what was then her amendment 88 had merit. I am pleased that, following constructive discussions with both Ms Boyack and Alexander Stewart, she has lodged amendment 56, which I believe will increase the transparency of the valuation system in Scotland.
The Presiding Officer
I ask Sarah Boyack to wind up and to press or seek to withdraw amendment 56.
Sarah Boyack
Before I moved my amendment, I should have acknowledged Alexander Stewart’s work in this area. His was a slightly different ambition—to have reports delivered annually rather than every three years, as I propose—but I thank him for taking up the issue.
I will press amendment 56, and I hope that members will support it.
Amendment 56 agreed to.
The Presiding Officer
We turn to group 13, on the status of the secretary of the valuation appeal panel. Amendment 55, in the name of the minister, is the only amendment in the group.
Kate Forbes
This is another complex and technical area, because the law on rating is itself complex. It is important that, when the functions of valuation appeal committees are transferred to the Scottish tribunals, such tribunals have a sufficient number of qualified and experienced members with expertise in legal and valuation matters to be able to exercise those functions properly. That was called for by the Barclay implementation advisory group’s appeals sub-group.
Under the Tribunals (Scotland) Act 2014, the secretaries or assistant secretaries of valuation appeal panels, from which valuation appeal committees are drawn, cannot be transferred in to the Scottish tribunals. However, such people, who are often qualified solicitors, are integral to the work of valuation appeal committees and have considerable and valuable experience and expertise in valuation appeals and related legal matters, which would be lost if they were not able to become members of the Scottish tribunals.
In the fullness of time, tribunals will, of course, be able to appoint new members. However, given that the transfer will occur at the revaluation in 2022, and with a new two-stage appeal system also coming into force then, the tribunals are likely to start hearing cases very quickly. The reforms of the appeals system are intended to ensure the more timely resolution of cases, so it is crucial that the tribunals be set up to start hearing appeals without delay after the transfer. Amendment 55 makes the secretaries or assistant secretaries of valuation appeal panels “transferable persons” under the Tribunals (Scotland) Act 2014.
Amendment 55 moved—[Kate Forbes]—and agreed to.
Before section 13C
The Presiding Officer
Group 14 is on the procedure for regulations setting non-domestic rates and rates relief. Amendment 26, in the name of Andy Wightman, is grouped with amendments 27, 27A and 57.
Andy Wightman
My amendments in the group are not strictly technical, but they are procedural. As members know, the non-domestic rate is set annually by order via a negative instrument, which, this parliamentary session, has been considered by the Scottish Parliament’s Local Government and Communities Committee. Given that the tax raises just less than £3 billion annually, in my view, it is inappropriate for such a tax rate to be set using a procedure that entails very little scrutiny.
I was probably the first MSP to move a motion to annul the order, which I did a couple of years ago. I did so not because I necessarily wanted to reject the order, but because that was the only way in which we could scrutinise the cabinet secretary on his choice of tax rate for, as I say, the second-largest tax that is proposed by ministers and set by the Parliament. If we were introducing legislation today, it is inconceivable that Graham Simpson and his Delegated Powers and Law Reform Committee would agree to such an important order being subject to the negative procedure.
Just this morning, the Economy, Energy and Fair Work Committee discussed the imminent introduction of regulations to ensure that the appointment of members to the proposed new consumer Scotland body are overseen by the Commissioner for Ethical Standards in Public Life in Scotland. That is a fairly non-contentious proposition, but an affirmative instrument was used. It is bizarre that the affirmative procedure is used for such a routine—albeit important—matter, whereas the second-largest devolved tax is subject to so little scrutiny.
Stewart Stevenson (Banffshire and Buchan Coast) (SNP)
Will the member accept that the amount of scrutiny of any order that is endorsed by default, or by positive action by the Parliament, is a choice for the Parliament? In the past, we have had debates on negative instruments that were functionally equivalent to any other debate. It is unhelpful to suggest that negative instruments pass through Parliament without scrutiny. All such instruments go to a committee, which can scrutinise to the extent that it chooses.
Andy Wightman
I accept that members can scrutinise negative instruments to the same degree as they can scrutinise affirmative instruments, but we have the affirmative and negative procedures to reflect the relative importance of subordinate legislation. It seems inappropriate to have to rely on a member moving a motion to annul an order—which they actually probably agree with—merely to get the minister along in order to have a debate. I have made my case, and I think that members understand it well.
At stage 2, we considered the fact that all reliefs under section 153 of the Local Government etc (Scotland) Act 1994 are also set via negative procedures, and we agreed to an amendment that requires that such instruments be subject to affirmative procedure. The instruments tend to all come in a bundle in about February, and they include those on the small business bonus scheme and other relief schemes that are introduced annually and that require the expenditure of considerable sums of money. The small business bonus scheme gives the Government the authority to spend about £270 million of public money each year. The proposal that all such instruments be required to be subject to affirmative procedure became section 13C of the bill, which the minister proposes to remove through amendment 57.
I recognise that section 13C is too general and captures all instruments that are passed under section 153 of the 1994 act, which is not appropriate. I have therefore lodged amendment 27 to ensure that only instruments that grant relief—and thus public expenditure of more than £10 million per annum—would be subject to affirmative procedure. The decision on the quantum of the relief would be left to ministers’ good judgment, and amendment 27A allows ministers to amend the £10 million figure in the future.
17:00I have not lodged the amendments in group 14 because I have any serious important policy intent; I am just trying to make it easier for members in this and future Parliaments not to forget or lose sight of the fact that important public expenditure comes through this Parliament via negative instruments, which are easier for members to miss and have to go through a complicated procedure. Actually, it is not that complicated, but it—a motion to annul and all that nonsense—is just another thing that we have to do.
As I have said, if the provisions were being introduced in legislation today, I have no doubt whatsoever in my mind that they would be subject to affirmative procedure.
I move amendment 26.
Kate Forbes
As Andy Wightman has said, through amendment 26, he is seeking to make the poundage-setting order subject to affirmative procedure as opposed to the negative procedure. We discussed the matter at stage 2, when I said that non-domestic rates decisions have been set out as part of the budget for many years and are subjected to extensive consultation and scrutiny through that process. I think that that gives Parliament and ratepayers a clear and explicit indication of the Government’s policy intention, which is a key recommendation of Barclay.
I struggle to see why using affirmative procedure would be more appropriate than using negative procedure, because it would not bestow any greater power on a committee and the committee would be able to scrutinise the order as it has always done.
Amendments 27 and 27A propose a threshold to determine whether regulations providing reliefs will be subject to affirmative or negative procedure.
Mike Rumbles
Has the minister not just made the case that the Government sees no difference between affirmative and negative procedure?
Kate Forbes
As to the committees’ ability to scrutinise the poundage, there is no difference. The point is that the committees can invite ministers to give evidence whenever they please, and they can freely scrutinise the order as they have always done. I am not aware of any precedent for allowing ministers to decide the likely cost before determining the procedure that the Parliament will follow.
Members will be clear what my views are on the procedural matters. I do not see the point of change simply for change’s sake. Since the Parliament can scrutinise closely if it wishes to do so, I do not see what the merits of change would be.
My amendment 57 is a simple and straightforward amendment that seeks the removal of section 13C.
Graham Simpson
Andy Wightman mentioned the DPLR Committee. One of the functions of that committee is to decide, or to make recommendations on, the procedures that should be used, so he is right to mention it.
These matters might seem dull to a lot of people, but they are important. There is a difference between using affirmative procedure and using negative procedure, which is why the DPLR Committee often makes recommendations on that issue. I am not quite sure why we did not do so on this occasion.
Andy Wightman raised an important point regarding amendment 26. The second-largest devolved tax should not be put through using the negative procedure. Affirmative procedure, however dull it appears to members, gives members a greater level of scrutiny, which is very important when we are talking about such large sums of money.
We will support Andy Wightman’s amendments.
Andy Wightman
This should be a fairly straightforward matter. As Graham Simpson said, we are talking about reliefs worth hundreds of millions of pounds and tax rates that raise billions of pounds. The idea that those should go through Parliament via a negative instrument is, frankly, ridiculous, and I am not at all convinced by the minister’s arguments to the contrary. Of course, income tax rates are announced in the budget, so that would be an argument for not having an income tax resolution. She cannot equate specific powers that give ministers the authority to spend money and local government the power to raise money with a general overview of the budget that contains many measures that, this year, will be subjected to little scrutiny.
I press amendment 26 and urge members to support all the amendments in group 14.
The Presiding Officer
The question is, that amendment 26 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 36, Against 76, Abstentions 0.
Amendment 26 disagreed to.
Section 13C—Procedure for power to prescribe amount of non-domestic rates
Amendment 27A moved—[Andy Wightman].
The Presiding Officer
The question is, that amendment 27A be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 36, Against 76, Abstentions 0.
Amendment 27A disagreed to.
Amendment 27 moved—[Andy Wightman].
The Presiding Officer
The question is, that amendment 27 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 36, Against 76, Abstentions 0.
Amendment 27 disagreed to.
Amendment 57 moved—[Kate Forbes].
The Presiding Officer
The question is, that amendment 57 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
The Presiding Officer
The result of the division is: For 76, Against 36, Abstentions 0.
Amendment 57 agreed to.
Section 14—Assessor information notices
Amendment 58 moved—[Kate Forbes]—and agreed to.
The Presiding Officer
Group 15 is on assessor information notices and penalties. Amendment 19, in the name of Graham Simpson, is grouped with amendments 63, 64, 20 and 65.
Graham Simpson
The poor returns to assessors when they ask for information are a cause for concern and the level of those returns must improve. An assessor may give an assessor information notice to two types of people. The first consists of any person whom the assessor thinks is a proprietor, tenant or occupier of lands or heritages that the assessor has the function of valuing, while the second consists of any other person whom the assessor thinks has information that is reasonably required.
Amendment 19 seeks to remove that second type. The power, which is too wide, means that assessors can literally decide whom they want to target—whether they have information or not—and those targeted people have to comply or face a fine. The First Minister or any of us could be written to and face a penalty if we did not respond. Removing lines 28 and 29 on page 14 will make this section of the bill more reasonable; again, the amendment is supported by business.
Amendments that were agreed to at stage 2 that increased penalties for non-compliance and shortened the period for compliance appear extremely onerous, according to the chambers of commerce. Amendment 63 deals with the time that is allowed to respond to an assessor information notice. At stage 2, that was reduced from 56 days to 28 days. My concern, which is shared by business, is that 28 days is not long enough and that some business owners might not be able to comply in that time. A small business owner, for example, could be on holiday or ill. Small business owners often do not have a full understanding of what information is being requested and for what purpose. Businesses have called for the period of 56 days to be reinstated. I have gone for the middle ground at 42 days, which sounds more reasonable.
The level of fines for not complying has shot up. More than anything, I see that as a deterrent, so I have resisted calls to lodge an amendment to cut them. However, amendment 20 calls for a review within two years of the level of civil penalties and the timescales for compliance.
As with the other amendments in my name in this group, amendments 63 and 20 are backed by business organisations.
We support Kate Forbes’s amendment 64.
I move amendment 19.
Kate Forbes
Amendments 19 and 63 are, in essence, about the information-gathering powers of an assessor.
As Graham Simpson said, I am aware that there is concern among certain stakeholders that the assessors will inappropriately approach third parties for information. That concern is unfounded. An assessor can seek information only where the requirement is reasonable. There are occasions when it will be reasonable to seek information from a person who is not the proprietor, tenant or occupier. One of the most obvious examples relates to local authorities and public-private partnership schools. Until now, assessors have been able to go only to the local authority, as the tenant, to get information on the cost of the maintenance contract. However, using section 14, the assessor would be able to go to a third party, which could be the builder, to find out the build costs. That would reduce the time that it takes to get information and ensure that the valuation is more accurate. That is a key concern of the bill.
Therefore, I do not support amendment 19, because it would limit the service of notices to the person whom the assessor thinks is a proprietor, tenant or occupier.
I turn to civil penalty timescales. When information is not provided to the assessor, it is clear that, in the context of a three-yearly revaluation cycle with a one-year tone date, the 56-day time period in the bill as introduced for the return of an assessor information notice was too long—hence my stage 2 amendment to reduce that period to 28 days.
As for considering the penalties and timescales for complying with notices under the English legislation, the bill as introduced mirrored those provisions. However, the clear message that I took away from stage 1 is that those civil penalty levels were set too low; I addressed that through my stage 2 amendments.
Mr Simpson stated at stage 2 that he wanted to strike a balance between the 28 days of compliance that I was proposing and the 56 days in the bill as introduced. I have listened to the concerns that a number of business organisations expressed over the time that it might take to obtain the potentially detailed and complex information that the assessor requires.
Amendment 63 leaves the period of compliance with an information notice untouched at 28 days but increases the number of days before a second penalty may be served to at least 42 days after the first penalty. The equivalent figure is currently 28 days. I am more than happy almost to end this stage of amendments by supporting Graham Simpson. If he has good reason to believe that it is the best way to proceed, I will support amendment 63.
Amendment 20 would require Scottish ministers to commence a review of the civil penalty regime for non-compliance with an assessor information notice no later than spring 2022. It is important that the arrangements around civil penalties are allowed a realistic amount of time to settle in. The Scottish Government will monitor the moneys that are gathered from the civil penalties regime. Subject to parliamentary approval of any proposed regulations, for the time being, the ministers will have powers to increase or decrease the sums that are set out in relation to civil penalties. However, ministers have no powers to alter the periods for providing information; those would remain as set by the Parliament in the bill. Therefore, I do not support amendment 20.
Amendments 64 and 65, in my name, are important. Amendment 64 amends the second and third penalty liabilities that may arise where a person fails to comply with an assessor information notice. A first penalty arises after 28 days, with two subsequent penalty levels if the person continues to fail to comply; all three are cumulative. Two adjustments are proposed. The first is to introduce a minimum penalty of £1,000. That is for consistency with the penalties that have applied earlier, of at least £200 and then at least £1,000. The second is to reduce the penalty of 100 per cent of the rateable value by half, so that it will be 50 per cent of rateable value. That makes the penalties 1 per cent, then 20 per cent, then 50 per cent.
At committee, everyone agreed that it is important that assessors are provided with the right information at the right time to enable them to derive, as far as is practical, a valuation that is right first time. Having listened to the concerns of rating specialists and other stakeholders, I consider that the maximum amount that I propose in the amendment strikes an appropriate balance, based on the potential gains an individual could make by non-compliance with an assessor information notice. The amendment proposes a reasonable and consistent way for the penalties to increase, and it moves the maximum penalty in a direction that I hope Mr Simpson welcomes.
Amendment 65 adjusts section 19 so that regulations can provide for a penalty not to be payable while an appeal is pending.
I invite members to support amendments 64 and 65, which I believe strike the right balance between ensuring timely provision of information and fairness for all parties.
Willie Rennie
On amendment 19, the minister is right: the existing text includes the word “reasonably”. That should guard against Mr Simpson’s concerns or fear that lots of people are going to be sent needless paperwork.
Amendment 20 suggests a review. That is what committees do when they look back at legislation. Committees in the Parliament should carry out post-legislative scrutiny more often, so there is no need for a new quango to be set up to do that piece of work.
On amendment 65, it seems eminently sensible to have the power to regulate on such matters.
The Presiding Officer
I call Graham Simpson to wind up on the group, and to press or withdraw amendment 19.
Graham Simpson
I press the amendment.
I thank the minister for finally agreeing to an amendment of mine—I had thought that I was going to get through the whole afternoon without her doing that.
The Presiding Officer
The question is, that amendment 19 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 26, Against 86, Abstentions 0.
Amendment 19 disagreed to.
Amendment 59 moved—[Kate Forbes]—and agreed to.
Section 15—Local authority information notices
Amendment 60 moved—[Kate Forbes]—and agreed to.
Section 16—Duty to notify changes of circumstances
Amendments 61 and 62 moved—[Kate Forbes]—and agreed to.
Section 18—Civil penalties for failure to comply with assessor information notices
Amendment 63 moved—[Graham Simpson].
The Presiding Officer
The question is, that amendment 63 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Campbell, Aileen (Clydesdale) (SNP)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Corry, Maurice (West Scotland) (Con)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Golden, Maurice (West Scotland) (Con)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harper, Emma (South Scotland) (SNP)
Harris, Alison (Central Scotland) (Con)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lochhead, Richard (Moray) (SNP)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Mason, Tom (North East Scotland) (Con)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wells, Annie (Glasgow) (Con)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Whittle, Brian (South Scotland) (Con)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Finnie, John (Highlands and Islands) (Green)
Greer, Ross (West Scotland) (Green)
Harvie, Patrick (Glasgow) (Green)
Johnstone, Alison (Lothian) (Green)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Wightman, Andy (Lothian) (Green)
The Presiding Officer
The result of the division is: For 106, Against 6, Abstentions 0.
Amendment 63 agreed to.
Amendment 64 moved—[Kate Forbes]—and agreed to.
Amendment 8 moved—[Alexander Stewart]—and agreed to.
After section 18
Amendment 20 moved—[Graham Simpson].
The Presiding Officer
The question is, that amendment 20 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 26, Against 85, Abstentions 0.
Amendment 20 disagreed to.
Section 19—Penalties under section 18: appeals and enforcement
Amendment 65 moved—[Kate Forbes]—and agreed to.
Amendment 10 moved—[Alexander Stewart].
The Presiding Officer
The question is, that amendment 10 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Macdonald, Lewis (North East Scotland) (Lab)
Marra, Jenny (North East Scotland) (Lab)
Mason, Tom (North East Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 52, Against 58, Abstentions 0.
Amendment 10 disagreed to.
Amendment 9 moved—[Alexander Stewart].
The Presiding Officer
The question is, that amendment 9 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Macdonald, Lewis (North East Scotland) (Lab)
Marra, Jenny (North East Scotland) (Lab)
Mason, Tom (North East Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 52, Against 59, Abstentions 0.
Amendment 9 disagreed to.
Amendment 66 moved—[Alexander Stewart]—and agreed to.
Section 20—Civil penalties for failure to comply with local authority information notices and for failure to notify changes in circumstances
Amendment 11 moved—[Alexander Stewart]—and agreed to.
Section 21—Penalties under section 20: appeals and enforcement
Amendment 13 moved—[Alexander Stewart].
The Presiding Officer
The question is, that amendment 13 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Macdonald, Lewis (North East Scotland) (Lab)
Marra, Jenny (North East Scotland) (Lab)
Mason, Tom (North East Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 52, Against 59, Abstentions 0.
Amendment 13 disagreed to.
Amendment 12 moved—[Alexander Stewart].
The Presiding Officer
The question is, that amendment 12 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Macdonald, Lewis (North East Scotland) (Lab)
Marra, Jenny (North East Scotland) (Lab)
Mason, Tom (North East Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 52, Against 58, Abstentions 0.
Amendment 12 disagreed to.
Amendment 67 moved—[Alexander Stewart]—and agreed to.
Section 21A—Penalties under section 20: enforcement
Amendment 14 moved—[Alexander Stewart].
The Presiding Officer
The question is, that amendment 14 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Lennon, Monica (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Macdonald, Lewis (North East Scotland) (Lab)
Marra, Jenny (North East Scotland) (Lab)
Mason, Tom (North East Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 53, Against 59, Abstentions 0.
Amendment 14 disagreed to.
Section 30—Commencement
Amendments 21, 28 and 68 not moved.
Amendment 15 moved—[Graham Simpson].
The Presiding Officer
The question is, that amendment 15 be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wishart, Beatrice (Shetland Islands) (LD)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lennon, Monica (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 30, Against 82, Abstentions 0.
Amendment 15 disagreed to.
Amendments 69, 70, 29, 71 and 72 not moved.
The Presiding Officer
That ends consideration of amendments.
At this point in proceedings, I am required under standing orders to decide whether, in my view, any provision of the bill relates to a protected subject matter; that is, whether it amends or modifies the electoral system or franchise for Scottish parliamentary elections. In my view, the bill does no such thing, and therefore it does not require a supermajority at stage 3. I remind members that the stage 3 debate on the bill will take place tomorrow afternoon at half past 5.
4 February 2020
Final debate on the Bill
Once they've debated the amendments, the MSPs discuss the final version of the Bill.
Final debate transcript
The Deputy Presiding Officer (Linda Fabiani)
The next item of business is a stage 3 debate on motion S5M-20705, in the name of Kate Forbes, on the Non-Domestic Rates (Scotland) Bill.
Before I invite Kate Forbes to open the debate, I call Derek Mackay to signify Crown consent to the bill.
The Cabinet Secretary for Finance, Economy and Fair Work (Derek Mackay)
For the purposes of rule 9.11 of the standing orders, I advise the Parliament that Her Majesty, having been informed of the purport of the Non-Domestic Rates (Scotland) Bill, has consented to place her prerogative and interests, in so far as they are affected by the bill, at the disposal of the Parliament for the purposes of the bill.
The Deputy Presiding Officer
Thank you, Mr Mackay.
I call Kate Forbes to speak to and move the motion, for up to seven minutes and no longer, please.
17:33The Minister for Public Finance and Digital Economy (Kate Forbes)
I am pleased to open the stage 3 debate on the Non-Domestic Rates (Scotland) Bill. I start with a number of thank yous, first to the Local Government and Communities Committee and the Delegated Powers and Law Reform Committee for their detailed scrutiny of the bill. I had the pleasure of meeting Ken Barclay for the first time yesterday, and I thank him, too, for his contribution to the review that led us to the bill.
The Barclay review was established a number of years ago with a very specific remit:
“To make recommendations that seek to enhance and reform the non-domestic rates ... system in Scotland to better support business growth and long term investment and reflect changing marketplaces”.
The need for reform was widely recognised across the chamber. Only two weeks ago, Mr Fraser, on behalf of the Conservatives, wrote in a national newspaper:
“It is our view that the current system of rates is ... in need of comprehensive reform.”
I will say this only once: wise words indeed. The bill was introduced to support growth, improve the administration of the system and increase fairness for ratepayers. It is fair to say that, after a bumpy few weeks, it now does just that.
The bill has been built on collaboration and consultation. I thank the individuals on the Barclay implementation advisory group and its associated sub-groups who have freely devoted their time to the development of its provisions. I also thank members of the business community, as well as officials in councils and assessors’ offices across the country, who have worked to produce a bill that will not only deliver the word and the spirit of the Barclay review but work on the ground operationally.
Finally, I thank the Convention of Scottish Local Authorities for its recognition that non-domestic rates are too important to be considered in isolation from wider fiscal framework arrangements and treated like a plaything or a negotiating tactic. I look forward to working closely with COSLA on the fiscal framework, which will proceed at pace.
The bill, which is the first on non-domestic rates to come before the Scottish Parliament, was introduced to deliver the 30 recommendations of the Barclay review. Derek Mackay is to be commended for the speed with which he moved to implement the recommendations that could be implemented without the need for primary legislation. I have been pleased to progress work on the bill, which seeks to support growth, improve administration of the system and increase fairness. We have just had a debate on the budget and the need for economic growth. I point out that the bill’s aims are integrally linked to the economic performance of our businesses.
The Scottish Government has accepted the majority of the review’s recommendations and, as I have said, where possible, it has moved quickly to implement them. The best examples are the business growth accelerator, which is the only relief of its kind in the United Kingdom, and nursery relief, which supports our expansion of nursery and childcare provision. Until yesterday’s stage 3 proceedings, both of those initiatives were under serious threat of abolition.
The bill delivers on the Barclay review recommendations that required primary legislation. The provision that is probably of most importance involves the move to a three-year revaluation cycle to minimise the risks of the volatility that the adoption of a one-year tone date should reduce. It will ensure that rateable values are more closely aligned with real market rents and has been widely welcomed across the board by the business community.
The bill also gives new powers to assessors, local authorities and ministers to improve the administration of the system and to tackle tax avoidance, which I think that every member in the chamber would support.
Perhaps the most critical reforms that the bill delivers are those to the appeals system, which are intended to reduce reliance on the formal system and speed up access to justice in relation to properties that are involved in appeals. Throughout the bill’s progress through the Parliament, I have consistently said that if we did not get the appeals right, the rest of the reforms would be redundant. Our systematic reforms will benefit around 255,000 non-domestic properties in Scotland, 90 per cent of which already benefit from the application of a lower poundage in Scotland than they would attract if situated elsewhere in the UK, and also from the most generous package of reliefs available anywhere on these islands.
As legislators, we have a duty to deliver legislation that improves outcomes for stakeholders. We take that duty seriously. In a Parliament of minorities, no legislation will deliver everything that we want, so it comes down to a question of priorities. I think that we have heard that view being expressed quite starkly, particularly from the Scottish Conservatives. It is unfortunate that avoiding a level playing field between independent schools and local authority schools appears to have become so totemic to them in the bill process that 125 affected properties were considered to be of greater priority than the other 255,000 non-domestic properties.
The decision whether to support the bill comes down to the simple question whether members believe that the rates system needs reform. The Scottish Government’s view is that the reforms that the Barclay review proposed struck the right balance between ambition and pragmatism. However, most of them could not be implemented mid-revaluation, and we simply cannot wait until 2027 to do so. The majority of them have been universally welcomed by ratepayers and administrators alike. We need more regular revaluations; we need a reformed appeals process; we need greater powers to tackle rates avoidance; and councils and assessors need the tools to do their jobs more efficiently and effectively. Surely we can all agree on that, and that is the prize that is on offer. The bill delivers on the cross-party agreement on rates system reform and I encourage everyone in the chamber to support these critical reforms.
I move,
That the Parliament agrees that the Non-Domestic Rates (Scotland) Bill be passed.
17:40Murdo Fraser (Mid Scotland and Fife) (Con)
I will make some concluding remarks on the Non-Domestic Rates (Scotland) Bill. The bill will implement the findings of the Barclay review of non-domestic rates, many of which were welcome.
The move from a five-year to a three-year revaluation cycle has been supported by the business community, as have proposals for a business accelerator, which will create an incentive for businesses to expand and will help to remove the existing disincentive for speculative development by landlords. If it works, it will stimulate growth and investment and assist economic growth. Some of the technical changes in the bill, such as making it easier to collect information from ratepayers and improving transparency, will also be welcome.
The bill does not of course implement all the findings of the Barclay review. It was hamstrung from the start by being told it had to be revenue neutral and therefore had to look for means of raising money to balance out the new reliefs being granted. Ken Barclay and his colleagues found two targets from which to raise extra money—local authority arm’s-length external organisations and independent schools.
The recommendation to end the tax relief for ALEOs proved to be highly controversial, with local authorities across the country complaining, rightly, that it would mean a negative impact on their budgets and/or an increase in charges at the likes of local leisure centres and swimming pools. Fortunately, following vigorous opposition from the Scottish Conservatives against the swim tax, the Scottish Government decided to U-turn, and it backed down on the proposal.
Regrettably, the Scottish Government did not back down in relation to the other measure that is intended to raise additional funds—namely a change to the tax treatment of independent schools. Yesterday, we set out some of the arguments why we feel that that is the wrong move. As the Office of the Scottish Charity Regulator has made clear, a number of independent schools are in a marginal financial position. For example, I can think of five independent schools in Perth and Kinross that have closed in the past two decades—schools such as Rannoch, Croftinloan and Butterstone, all of which not only provided education but were important parts of local economies.
The money spent on independent schools supports jobs in what are often rural areas, directly in terms of teaching and non-teaching staff in schools but also in terms of the broader spend in local economies. In the local economy of a town such as Crieff, in which there are a number of local independent schools, shops, hospitality businesses and tradespeople’s livelihoods depend on the existence of those schools and the spend from the school and the staff who work there.
The same would apply to a town such as Dollar in Clackmannanshire, where the major local employer is Dollar academy. Taxing those schools more will have a negative economic impact. That is not to suggest that a school the size of Dollar academy is necessarily going to close because of the bill, but there are smaller independent schools, including small Christian schools as we heard yesterday, that may find themselves in that category.
Keith Brown (Clackmannanshire and Dunblane) (SNP)
Murdo Fraser has now mentioned Dollar for the second time today. Has he spoken to the rector of Dollar academy on this issue?
Murdo Fraser
Liz Smith has engaged with Dollar academy and many of the parents in Dollar on the issue and they share many of our concerns. There is a concern about this.
What we have not heard from the Scottish Government, or from the minister yesterday, is any attempt to defend or justify the policy. I suspect that what really lies behind it is that it is an easy sector to attack. It has few political friends. This all has the unhealthy stench of the politics of envy. That is the reason why, with regret, we cannot support the bill despite agreeing with a lot of what it contains.
There is a broader point in relation to rates. Although the Barclay review recommendations are generally positive, our concern is that they do not go far enough. There is a serious debate to be had about the future of the rating system more generally. What we have seen in recent years are a number of sticking-plaster solutions being introduced to deal with complaints from businesses about rates increases from revaluations, such as the reliefs that have been brought in for the hospitality sector and for offices in the north-east of Scotland. Moving from a five-year to a three-year cycle will improve matters, but it will not eradicate the problem entirely.
There is also a serious question as to whether a property-based tax is still relevant, particularly as it relates to a sector such as retail, in an environment in which retail is increasingly under pressure from online traders. There is simply no level playing field between online retail and the sector that has to support high street premises. Therefore, it is our view that a more fundamental look at the whole rating system is required, as is being proposed by the Government south of the border. I know that that view is widely supported in the business community, and I hope that the Scottish Government will undertake such an exercise in the future.
No discussion on rates would be complete without a mention of the large business supplement, which in Scotland is currently set at a rate that is nearly double that south of the border. More than 5,000 retail premises in Scotland pay the LBS and, cumulatively, they contribute more than £14 million annually. The higher rate in Scotland puts those businesses at a competitive disadvantage to businesses in the rest of the UK. The LBS is a measure that is long overdue for being dealt with and—who knows?—maybe the Cabinet Secretary for Finance, Economy and Fair Work will have some good news for us on that in tomorrow’s budget.
Although there is much in the bill that we support, because of the tax raid on independent schools, which will damage local economies and which seems to be motivated purely by the politics of envy, I regret that we will not be able to support it at decision time.
17:46Sarah Boyack (Lothian) (Lab)
I begin by thanking everyone who has contributed to the debate on the bill, whether in yesterday’s proceedings or in any of the discussions that we have had over the past few months, from the stage 1 process to today’s stage 3 debate. I thank the national and trade organisations and the local groups and individual constituents who got in touch with us. I also thank the staff in the Scottish Government and our Parliament clerks, who helped members of the Local Government and Communities Committee and other members to ensure that our amendments were crafted in such a way as to deliver what we intended, and that we were able to have informed debates on what is a hugely important issue.
Finally, I thank the minister for her constructive approach to the debate and for being prepared to work with us—even when she did not agree with us, she was prepared to make sure that our amendments were crafted correctly.
The minister and Murdo Fraser have highlighted the changes that the bill will introduce. I will highlight a couple of important issues that were raised and dealt with at stage 2, but which have not yet been mentioned. I was very glad that colleagues supported my amendment to increase the amount of time that businesses have to provide notification of a change in circumstances from 21 to 42 days, reflecting the pressures and challenges that small businesses in particular face in meeting such a tight deadline. It was important to act on that, and the action that we took at stage 2 was followed up by Graham Simpson’s stage 3 amendment on the matter.
The second issue that I want to raise is that of phoenixing, which I put on the agenda through a probing amendment. Phoenixing occurs when companies still operate from a premises or address but reinvent themselves, perhaps through the use of shell companies, to evade their responsibility to pay tax for the local services that they use. The discussion that we had on that subject was very constructive and we secured a commitment from the Scottish Government to work with the Convention of Scottish Local Authorities and the Institute of Revenues Rating and Valuation to create regulations on the issue. It was a difficult subject to address at stage 2 of a bill, but I have received a commitment that work will be done on the matter, which we hope will be finished by the end of the calendar year, and I very much welcome that.
Broadly, yesterday’s stage 3 proceedings were constructive, even though we disagree on many issues. It clarified the work that has gone into simplifying a very complex system of taxation and ensuring that there is a greater level of transparency, for which there is support from across the Parliament. I look forward to seeing how the changes that we have made to the bill—and, in particular, the work on the fiscal framework and the wider movement to financially empower and fund our local authorities—will be progressed. We should not forget that our local authorities are at the heart of the bill, because the money that is raised through non-domestic rates goes to them, and the provision of local services is crucial to all our communities, as anyone who listened to the previous debate will know.
One issue that was central to yesterday’s debate and that was picked up by me and Graham Simpson was the important role of Opposition parties in testing the boundaries of legislation through our principle discussions at stage 1 and the detailed discussions at stage 2. That was the case in relation to future proofing the bill, as my amendment on low-carbon energy that was agreed to yesterday does; to testing; to debates on key issues being opened up more broadly; and, critically, to how legislation will work in practice.
I will use the example of student accommodation, which was highlighted in the Barclay report but not included in the legislation. As I said yesterday, my stage 2 amendment was concerned with tackling the issue, which is particularly visible in our cities and which crosses ministerial portfolios, including those on finance, housing and education. The amendment was agreed to and included in the bill with cross-party support, and I undertook consultation with key stakeholders. Due to the size of the issue, its cross-cutting nature and the chance of unintended consequences hitting students who already face high rents, I was persuaded, having consulted stakeholders and with support from across the chamber, that including the provision in the bill was not the best way of tackling the issue. However, we were able to raise concerns about the debt that students—graduates, in particular—face.
Research that has been done by the National Union of Students and Unipol highlights that some university institutions provide good student accommodation and that such models are more cost effective, because there is provision for students with special needs, adaptable accommodation and quiet blocks are provided, students with families are supported and there are annual rent discussions. We need to learn from best practice. The mayor of London has introduced new planning requirements that ensure that universities provide affordable student housing. That issue has been raised in Edinburgh, particularly in the context of our new local plan.
The Deputy Presiding Officer
You must come to a close, please.
Sarah Boyack
In Ireland, the link has been made between rent pressure zones and affordable student accommodation.
All politicians in this chamber have the job of listening to our constituents; that is not just the job of Opposition parties. We need to test and push legislation at every stage of the process to ensure that it works for everyone. I believe that we have done that collectively and successfully with this bill.
17:52Andy Wightman (Lothian) (Green)
I, too, thank all those who have engaged in the process and who have supported the process in Parliament.
I noted at stage 1—indeed, the minister mentioned this in her opening remarks—that this is the first time that the Scottish Parliament has considered primary legislation on non-domestic rates. That is very telling, because it demonstrates how little interest there has been in Parliament in local tax and how much power the Local Government Finance Act 1992 gave to the Secretary of State for Scotland—now, to the Scottish ministers—in relation to setting the detailed design of the system through secondary legislation.
In September 2013, Derek Mackay—who was here a minute ago—the then Minister for Local Government and Planning, said that the Scottish Government would
“conduct a thorough and comprehensive review of the whole business rates system”
by 2017, which would deliver
“a fairer, simpler and more efficient business rates system.”
That review never took place. Instead, we had the Barclay review, which asked only one question:
“How would you redesign the business rates system to better support business and incentivise investment?”
That was not an inappropriate question to ask, but many other questions should have been asked, too. That narrow focus raises some fundamental points about how we develop policy and legislation.
For example, yesterday, we heard major questions about who sets the tax rate and about the treatment of privately owned student residences. Concerns have been raised about the manner in which section 10 came into being—not as a consequence of any review of charitable relief but as a means by which to raise some revenue to pay for the tax cuts that the Barclay review was focused on.
Too often, the Government, for whatever reason, feels the need to outsource policy development to so-called independent reviews. Instead of reaching out to the public or other politicians with a discussion paper or a consultation in order to gather views on the possible scope of legislation—in this case, we were dealing with primary legislation on non-domestic rates for the first time—it asks others to do the thinking. In the case of the Barclay review, such thinking was framed by an incredibly narrow remit.
We have bills to implement any reforms that are needed, but, not surprisingly, MSPs have their own ideas about the reform of non-domestic rates. We have to work within the confines of the stage 2 process to develop our ideas. The Non-Domestic Rates (Scotland) Bill was the first time that any member has had the chance to do something, because there has never been the opportunity up until now.
In her opening remarks, the minister talked about the past few weeks being “bumpy” and about aspects of the process being used as a “plaything”. I call it democracy, and I think that we should improve the system.
Since stage 2, I have had meetings and conference calls with many business groups. Although we disagree on many issues, it was something of a surprise to hear that they agreed with me that the comprehensive review that was promised back in 2013 is still needed. I pointed out that it was bit late for that, but there we are.
I will conclude by saying something about my attempt to repatriate rate setting to councils. That was not agreed to, but I am sure that it will happen. Yesterday, I quoted comments made by the constitutional steering group—which drafted the standing orders for the Parliament—in its 20th anniversary report:
“The Scottish Constitutional Convention recommended that the Scotland Act should commit the Scottish Parliament to securing and maintaining a strong and effective system of local government, embodying the principle of subsidiarity ... What we have seen instead with successive governments is a tightening of central control over local budgets and spending priorities. Our view is that the benefits of bringing decision-making back to Edinburgh in 1999 should flow through to proper empowerment of local communities through their local representative bodies.”
As I highlighted at stage 1, the removal of that tax base from the control of its historical owners—local government—is, in our view, a violation of international law. Article 9 of the Council of Europe’s European Charter of Local Self-Government provides legal protection. Article 9.3 states:
“Part at least of the financial resources of local authorities shall derive from local taxes and charges of which, within the limits of statute, they have the power to determine the rate.”
Today, they do not. We do not believe that the removal of that tax base from the control of its historical owners can be allowed to persist, because it violates international law. We cannot support the bill, but neither will we stand in its way. The Greens will abstain on the motion at decision time.
The Deputy Presiding Officer
I call Willie Rennie for up to four minutes.
17:56Willie Rennie (North East Fife) (LD)
I get the point.
Andy Wightman’s speech was typical of his approach to the bill, which he has brought to life. I hope not to embarrass him too much with praise, but I genuinely think that he enlightened the debate and challenged us all. He challenged many of us on our localism credentials and the bill is better for that; certainly, the debate was better for it. It was a great disappointment to me that we did not follow through with the localisation of non-domestic rates. That would have empowered local authorities in the way that Andy Wightman described. His speech this afternoon was typical of his contribution to the discussion more generally.
I also praise Kate Forbes for the way in which she has approached the matter. She is always polite and respectful, even when it is clear that she strongly disagrees with every word that we are saying. An example of that was the way in which she adeptly avoided getting into the pit with the Conservatives yesterday over the independent schools debate. I would have preferred it if she had engaged a bit more in the debate, rather than hiding behind the Barclay review, but it was, nevertheless, an example of her polite and respectful way of dealing with the bill. I also praise the committees, the clerks and the officials for their contributions.
The bill should have gone much further. Substantial reform of local government is desperately needed, and needed now. If anybody is a plaything, local authorities are the plaything of central Government, in that they are given responsibilities but not the freedom to do things in a way that would work in their communities. Local authorities should live up to the responsibilities of the promises that they make, just as the Parliament and the Government should live up to their responsibilities and the decisions that they make. We should give local authorities the power to raise the majority of the money that they spend, just as this Parliament has the powers to do the same.
Keith Brown
Will the member take an intervention?
Willie Rennie
Not just now.
When you control the purse strings, you control your destiny. The sooner that we in Parliament learn that, the stronger our communities will be as a result.
The Liberal Democrats are unable to support the bill. At some point, we have to make a stand over bills that just tinker with the system rather than deliver the radical change that we want. The bill has made a mistake on the principle behind the independent schools issue. Of course there are arguments about the merits of independent schools—I do not wish to get into that—but I worry about us interfering with the operation of OSCR, which should be able to make the judgment as to whether an organisation is a charity or not. That should be the criterion on which we should view all charities. We are creating two tiers of charities, which is regrettable, and I think that, secretly, the minister probably believes that too.
We need bigger reforms. We are taking part in cross-party local government finance reform discussions on council tax reform, and I hope that the Government will make substantial proposals for that so that we can agree a constructive way forward. We have suggested a land value taxation system, which could be used right across local government finance. That will be our contribution to that debate.
However, a commitment is being made today on the fiscal framework for councils, and I hope that it is not another false dawn. Councils have been promised reforms repeatedly, as Andy Wightman pointed out earlier, and they have not been delivered. I hope, therefore, that something positive comes out of the bill, but I am not optimistic.
The Deputy Presiding Officer
We now move to the open debate, in which speeches must be absolutely no more than four minutes long. I warn members that if they go over their time, it will disadvantage members who come nearer the end of the debate.
18:01James Dornan (Glasgow Cathcart) (SNP)
In my role as convener of the Local Government and Communities Committee, I thank our clerks, the team at the Scottish Parliament information centre, the Government and the many people and organisations that provided us with evidence. I also thank my fellow committee members. I remind members that the committee was working to a pretty strict remit, and what came out was well worth the work that we put in. I enjoyed convening the committee throughout the bill’s legislative stages, so I am delighted to be given the opportunity to take part in today’s proceedings.
During the committee’s scrutiny of and discussion on the bill, there were some inevitable points of disagreement. I will mention them briefly. Relief for private schools was one—Murdo Fraser has just spent an inordinate amount of time discussing that—and Andy Wightman’s amendment on the devolution of business rates was another. The arguments on those two areas got a good airing yesterday, so I will not go over them again today.
Those two issues may have been the most contentious, but, lest we forget, in its stage 1 report, the committee unanimously endorsed the general principles of the bill. We welcomed it as an important staging post on the journey to modernisation of the system that began when Kenneth Barclay and his colleagues were appointed in summer 2016 with a wide remit to
“seek to enhance and reform non-domestic rates”.
To have reached the point where, it appears, we are about to pass a bill some of whose provisions will come into force in April is an impressive show of momentum, and credit is due to the Barclay review and the Scottish Government for their work.
I said that it appears that we are going to pass the bill, but the three previous speakers sounded as though they had searched through the bill to see whether they could find something that they disagreed with so that, although they seemed to support a lot of it, they could decide not to vote for it. That is disappointing.
A staging post is not a destination. The committee noted that much of the bill was a framework, with some crucial detail still to be sorted out. In the two or three minutes that I have left, I will focus on areas where the committee would agree, I think, that the momentum should be kept up.
The bill will speed up the revaluation cycle from five to three years, and everyone has welcomed that. It means more work for assessors at a time when the profession told us that recruitment and retention were becoming a bit of a problem. The Government pointed out that it has already provided welcome additional resources to the tune of £2.5 million this financial year in anticipation of the Barclay reforms. Assessors themselves accept that it is not just about money; in the longer term, the role needs to be made more visible and attractive to graduates and school leavers. Giving assessors more power to carry out their core role, as the bill does, should also help.
Everyone agrees that there are too many appeals against revaluation, and that they clog up the system. The bill puts in place ambitious reforms to the appeal system that will improve decisions and build trust in the system. It is widely accepted that we will have succeeded only if that brings the numbers down and, overall, provides finality on rates bills sooner.
In our stage 1 report, we noted three areas where changes could be made. The first is more digitalisation and a move to a more online system, and I am pleased to note that the Government appears to agree. The second is increased transparency and better communication between assessors and ratepayers. The committee heard from some ratepayers that much of the current process seems to be wrapped in mystery.
The third area is fees for appeals. The aim is not to create a new income stream, but simply to hit a pause button and make ratepayers stop and think about whether an appeal is worth the time and money. The numbers alone indicate that there is a problem, with appeals appearing to be almost an everyday part of the process.
Non-domestic rates might not get many people excited but, with hand on heart, I can say that the bill is one of the most diverse and interesting that the committee has considered during my time as convener. It has led us down interesting by-ways to golf clubs, bandstands and lace factories, among others.
Crucial challenges lie ahead, not least of which is reform of the small business bonus scheme, which the committee hopes will keep the system’s better features but eliminate its cliff edges and perverse incentives.
I hope that the bill becomes an act tonight. The committee looks forward to renewing our engagement with the non-domestic rates system in the future.
18:05Alexander Stewart (Mid Scotland and Fife) (Con)
I am pleased to take part in tonight’s stage 3 debate on the Non-Domestic Rates (Scotland) Bill. As my colleague Murdo Fraser has outlined, the Scottish Conservatives are not able to support it.
As a member of the Local Government and Communities Committee, I thank all those who gave evidence and briefings and who supported the committee during the bill’s passage.
For some time, the Scottish Conservatives have been calling for a comprehensive review of the Scottish rates regime. In recent years, rates revaluations have had a negative impact on Scottish businesses, particularly in the north-east, and Derek Mackay announced a package of relief measures worth £40 million to address that issue only after pressure from the Scottish Conservatives. However, the bill does not go far enough in addressing the more fundamental problems with the current rates regime.
One of the Barclay review’s main recommendations was to halve the large business supplement to bring it into line with the rate set in England. That will not be immediately implemented through the bill, and the Scottish Government has gone only as far as committing to implement it when it is affordable. That means that larger Scottish businesses will remain at a competitive disadvantage to their counterparts south of the border.
Although we supported a stage 2 amendment to allow localism to be debated, local authorities—through COSLA—and the business community raised concerns about the proposed approach. As a party, we are committed to devolving more powers to local authorities, and more flexibility and control over businesses rates. However, it is clear that we need to take a holistic approach to considering such devolved decision making, rather than the piecemeal approach that would have resulted from what was proposed.
One of the most concerning measures in the bill is the removal of charitable rates relief from independent schools, which is currently afforded to the private education sector. I pay tribute to my colleague Liz Smith MSP, who worked tirelessly on that issue with the sector.
Private schools teach about 4 per cent of all pupils in Scotland. Many of them struggle to meet their day-to-day running costs, and the bill could necessitate fee increases, cuts to bursaries or even closures. In turn, that will mean that more pupils will need to be educated in the state sector, leading to a burden on the taxpayer that will be greater than any increase in income from business rates.
As I mentioned yesterday, my region of Mid Scotland and Fife has many schools that fall into that category, including Dollar academy in Clackmannanshire, and Glenalmond college, Kilgraston school, Strathallan school and Morrison’s academy in Perthshire. All those schools could be jeopardised by the change in policy. The schools not only benefit the pupils who attend, but have a positive impact on their communities. They all have close links with state schools in their local areas and provide them with encouragement and support, and indirect and direct employment by the schools has an impact on the business community.
Education is a public good that benefits everyone, not just those who are in receipt of it, regardless of whether it is delivered by the state or by the independent sector, or whether parents pay fees directly to schools or indirectly through their taxes.
Time is moving on, so I will conclude. It is important to put on the record that the bill contains several changes to the rates system that we fully endorse and support. Unfortunately, the bill, both as introduced and in its amended form, will not deliver the wholesale review of business rates that we need and want, and it will harm our education sector. It is therefore regrettable and disappointing that we cannot support it at decision time.
18:09Daniel Johnson (Edinburgh Southern) (Lab)
I remind members of my entry in the register of members’ interests. I am a member of the Union of Shop, Distributive and Allied Workers and the Federation of Small Businesses. I am also a director of a company with retail interests—and I say that not just because it is my duty to do so as a parliamentarian, but because I rise to speak as a disgruntled shopkeeper.
I will tell members of my history with the non-domestic rates regime. In 2010, when I was running my business, the rateable value of one of my units went from £12,000 to more than £45,000 following revaluation. The appeal, which I had to take to the Lands Tribunal for Scotland, took 18 months. The assessor’s explanation and rationale for the change was that I was no longer using an entrance to the shop and therefore the RV was being applied to another portion. To my mind, there was a flaw in that logic: access between the two parts of the shop had been blocked up in 1972, yet, 30 years later, that was used as the rationale for the increase in my RV.
I tell that story to make the point that, for many small business owners, including small retailers, the non-domestic rates regime is opaque and unintuitive; the increases have been sporadic; and it has been extremely difficult to appeal. The bill is welcome, but it really only addresses those last two points. The three-yearly revaluations will provide consistency and remove the sporadic and large increases that some businesses have experienced. Likewise, the alteration to the appeals system is welcome, as anything that streamlines that process is welcome. However, for many business owners, the system will continue to feel largely arbitrary and unfathomable.
There are three things that still need to be done. First, we need increased transparency, because the methodology by which rateable values are calculated is extremely difficult to understand. I know from looking at my rates bill and the calculations that were made when I was taking forward my appeal that there were plug figures—literally arbitrary numbers—that inflated the value of certain areas. I do not see anything in the bill that will change that.
In my local area, after the most recent revaluation, I surveyed shopkeepers and found that, on average, they had experienced a 10 per cent rise in their rateable values, whereas rents had been largely flat in the same period, which takes me on to the second thing that needs to be done. Fundamentally, the bill fails to examine and reform the assessor system. It is a legacy that largely reflects the regional tier of government, which we no longer have. Much greater oversight and scrutiny is needed of assessors so that their calculations and the work that they do are transparent.
Thirdly, we need the process to be much more streamlined and intuitive and more in line with modern business practice. Unless the bill is backed up with real reform of the processes and technology that are used, businesses will continue to have issues in dealing with the non-domestic rates regime.
The most important point in the debate is that we need a comprehensive review of local government finance and taxation. The points that Andy Wightman and Willie Rennie have made on that today and previously are absolutely right. We must have full fiscal devolution and fiscal responsibility for local government. That cannot happen if we have piecemeal reform of the taxation powers that local authorities have at their disposal. Until we have that comprehensive review, we will continue to have issues with the non-domestic rates regime.
18:13Kenneth Gibson (Cunninghame North) (SNP)
I, too, thank the Local Government and Communities Committee clerks for all their hard work and sound advice as we took forward the bill.
In looking at the bill, one finds it difficult to construe how someone with as keen a mind as my good friend Graham Simpson could be seduced into backing amendment 9 at stage 2. Perhaps he fell victim to the roguish charm of Alexander Stewart or the persuasive arguments of Andy Wightman. Alternatively, perhaps it was to do with Mr Simpson’s get out of jail free card: his point that amendments are sometimes supported at stage 2 to “test the waters”, as he said yesterday. Bless. The band played “Believe it if you like”. Graham Simpson was not swimming yesterday; he was drowning. Like Pinocchio, his nose was growing with every word he spoke.
It was good to see the Tories—no doubt chastened by the barrage of 27 business organisations telling them that, with regard to removal of uniform business rates, they should not be so daft—reverse their position from that at stage 2. I welcome their road-to-Damascus conversion to common sense, which was something that we did not see from the Greens, who I understand did not even publish the results of their consultation from last September. Labour members, too, U-turned on the issue, after taking representations from USDAW. I welcome the fact that they listened.
Mr Wightman’s amendments 23 and 23A at stage 3 seemed to be a clever manoeuvre, but he looked like a rabbit in the headlights as his erstwhile Tory and Labour allies deserted him. He even suggested that Sarah Boyack was sidling up to Derek Mackay, which Mr Wightman happily did in 2017, 2018 and 2019.
On amendment 25, Andy Wightman argued, Grinch-like, that charity shops should, in effect, have to pay rates, regardless of whether a local authority had decided to waive its rights to impose 20 per cent. That seems to be a reversal of the localism that he purports to champion. The Lib Dems supported the Greens, passing over the eight years of a Lib Dem-Labour Scottish Executive that was notorious for ring fencing 60 different local authority budget lines. The entire episode shows how important it is that colleagues examine the impact of amendments before deciding whether to support them.
As for all the nonsense about private schools, one would think that a drastic change was being imposed. In fact, the payment of rates is the equivalent of about 1.3 per cent of fee income. I must apologise to members, because yesterday I said that that percentage was 1.8 per cent. That is of course a lot less than the 6 per cent impact of the teacher pay rises and pension changes last year, and significantly less than the 4 per cent average rise in fees in recent years.
The Tories are clearly obsessed with that relatively minor part of the bill and, by not supporting it, they are throwing the baby out with the bath water.
Liz Smith (Mid Scotland and Fife) (Con)
It is not that the Tories are obsessed with the issue; it is a genuine concern of many parents who have children at independent schools.
Kenneth Gibson
No one wants to pay more, but it is only a 1.3 per cent increase, when they are paying, on average, a 4 per cent increase in fees. Let us be honest—most of the people who go to those schools are, shall we say, better off than the majority.
The reason for the Tories being so concerned is no doubt because many of them attended such schools or send their children to them, yet not one of them declared an interest, as Neil Findlay pointed out yesterday. An unseemly dozen Tories felt the need to suck up to their constituency associations, with those who attended comprehensives being particularly keen to speak and those who attended Eton and Harrow being surprisingly sedate. I hope that when Michelle Ballantyne takes over, she will impose a better balance in her array of speakers.
As for not consulting, the committee took plenty of evidence, including through a visit to and meeting at George Watson’s college, which is Liz Smith’s alma mater—the school that she attended, taught at and even wrote a book about.
What about bursaries? All they do is enable private schools to hoover up talented young folk from the state sector to help the schools’ grades and allow them to charge yet more fees.
The Deputy Presiding Officer
Come to a close, please.
Kenneth Gibson
State schools pay rates. Private schools should pay rates, too, and I am delighted that the Parliament overwhelmingly agrees with that.
18:17Sarah Boyack
It makes me wonder how we get through our committee meetings. We have gone from James Dornan to Kenneth Gibson, who was as gracious as ever.
The bill is not perfect—I am clear about that. The Barclay review did not cover everything and we had some tight discussions in committee. However, the bill moves the situation forward and it picks up on some of the key issues in the Barclay review.
The challenge for us in Parliament will be post-legislative scrutiny. After the bill is passed, detailed discussions about many concerns will be required, including those picked up in Alexander Stewart’s amendments on having affirmative rather than negative instruments and the need for more consultation, as well as on additional things that we managed to get the minister to agree to move on. It is about what happens next. What political parties want to do is up to them. Some members might disagree with aspects of the bill, but we think that enough progress has been made in the bill to have made the process worth while.
The review was tightly constrained and it could have covered more, but we have dealt with what was in front of us. In relation to the devolution of non-domestic rates, there was a key issue about not just hearing from but listening to colleagues in local government. The strong view that came through was that, at the moment, devolving non-domestic rates without reviewing the fiscal settlements and, more generally, without the powers would entrench inequalities between some of our local authorities. Equalisation was a key concern, particularly at a time when local authority budgets are stretched to breaking point. We have demonstrated that we listened, even though there was much debate.
The fiscal framework is absolutely critical. I very much agree with Willie Rennie’s comments about the need to reform the existing council tax, which is regressive, a failure and not up to date. There is a lot of work to do on that. The Conservatives could come and join the rest of us on what is clearly a difficult issue.
I want to comment on the debate on private schools, which is the reason for the Conservatives not voting for the bill. Today, Murdo Fraser said that it was about the politics of envy, but it is not. It is about the politics of fairness.
The comment from the Barclay review was that independent and private schools are charities that benefit
“from reduced or zero rates bills, whereas council (state) schools do not qualify and generally will pay rates. This is unfair and that inequality should end by removing eligibility for charity relief from all independent schools.”
That is the right place for us to be.
Mike Rumbles (North East Scotland) (LD)
Will the member take an intervention?
Sarah Boyack
I will not.
The minister will have the flexibility to look at individual schools that make a case to her, which was the point raised by Andy Wightman yesterday. There is scope for ministers to act, but as a general principle, we support this provision in the bill.
We will support the bill this afternoon. The points made by Daniel Johnson on the need for a reality check on what it is like to run a small business were spot on. I hope that we have made some progress in this bill, but there will be more to follow, and increased transparency, oversight and parliamentary accountability are crucial going into the future. I hope that passing the bill today will not be the end of the story on the issues that colleagues have raised.
18:20Graham Simpson (Central Scotland) (Con)
This has been an interesting journey. It is fair to say that what looked like a fairly uncontroversial bill has proved to be anything but. However, I want to start my closing remarks by expressing disappointment. The Scottish Conservatives should have been able to support this bill, which is largely sensible. Any issues that we had could have been ironed out.
Our big concern, the politically motivated assault on the independent schools sector, could have been smoothed over. We offered compromise, but we were talking to a brick wall. Kate Forbes got her own way on the matter, but she should not be happy, because treating one part of the charitable sector differently from the rest has been attacked by the charity regulator and I can imagine the prospect of a legal challenge.
My party should have been able to back this bill, but Ms Forbes was not for moving. I suspect that that position comes not from her but from higher up; it could maybe even come from the First Minister.
The upshot of hitting charities with bigger bills is that some will close. I am convinced that some smaller schools will not survive because of what Parliament is about to do. I hope that Hamilton college in my region will. Perhaps the minister can advise what should happen to the pupils and the building that they are in should it not survive. I could see it becoming a top-class hotel or private leisure centre, and “elitist”—how ironic.
Today, the Scottish Council of Independent Schools told me that
“The 30,000 families, more than 3,000 teachers and more than 3,000 non-teaching staff in the independent sector will yesterday have been left in no doubt over the support or otherwise forthcoming from the Chamber. ... Any cursory post-legislative scrutiny would have shown the Parliament the genuine success of the 2005 Charity Act and unique public benefit test.”
The letter goes on to say:
“The independent sector will keep doing what it does best—for pupils from across Scotland, from all backgrounds, from all political persuasion and none. That is Scotland’s highest attainment, keeping subject choice as wide as possible, exporting Scottish education to the wider world, bringing pupils from over 50 countries to this country, and making real change to lives in their extra-curricular offer and wellbeing agendas.”
Until we got to stage 2 of the bill, the independent schools issue had attracted the most comment, then all hell broke loose when Andy Wightman unleashed his amendment 9 on the world. What a hoo-hah there was; what should have been an opportunity to debate the issue of devolving rate setting to local government got completely out of hand.
Sarah Boyack said earlier—and she was right—that stage 2 should have been an opportunity to properly test issues such as her amendment on student accommodation. At least we have a commitment to look at the issue of local government funding, and that is to be welcomed. Some good has come of the process.
We have ended up with a bill that does not have widespread support. Businesses have concerns. They think that they are being penalised and that the system here will put them at a disadvantage to businesses in other parts of the UK. Dr Liz Cameron, the chief executive of the Scottish Chambers of Commerce, said:
“The Scottish Chambers of Commerce is deeply concerned about the impact of Section 8B of the Bill which has the effect of completely removing Scottish ratepayers’ appeal rights when there is a change in economic circumstances.”
I mentioned that issue yesterday. Dr Cameron also said:
“The Conservative party tabled a Stage 3 amendment to seek such a consultation but all other parties voted against this sensible amendment to what we believe is a part of the Bill that will be damaging to all ratepayers.”
That is not something that the minister should be proud of.
The bill could have been a lot better. Business is happy only because something that was not in the bill originally is still not in it, but it is not happy about what is in the bill. The charity sector does not like it. It could all have been so different. We could—and should—have been able to support it, but we cannot.
18:25Kate Forbes
Before I respond to some of the specific points that have been made, I commend Andy Wightman on his efforts to raise the profile of non-domestic rates and the bill more generally through his amendments. I understand that this might be cold comfort, but I respect the fact that he is standing up for something that he passionately believes in. On that basis, I understand his decision not to support the bill. However, I thank him for his challenge, which has pushed me harder and made me rethink issues on a number of occasions. It has also caused my officials to think and think again. Although a faster review of the fiscal framework might be poor consolation compared with changing the law altogether, I do not think that the debate has been in vain. It might have been a frustrating experience in part, but he has done more than anybody else to raise awareness of the issue.
I understand their reasons, but I am disappointed that, although the Conservatives support 27 substantial sections of the bill, they will not support the bill because they do not support one substantive section.
On Labour’s position, Sarah Boyack is quite right to say that this is just the beginning for a lot of the issues that we have been airing for the first time during this process. Daniel Johnson brought to life the impact of the non-domestic rates system on real ratepayers up and down the country who are contending with the non-domestic rates system.
The bill progresses the issues quite significantly. Daniel Johnson, Sarah Boyack and James Dornan all talked about the next steps and the need for post-legislative scrutiny. The bill is clearly not coming to the end of the road tonight, although there will be a vote. It has opened up a number of conversations on issues such as phoenix companies, and we have agreed a timetable with Labour colleagues, which we are happy to share with other colleagues, for exploring that issue further and considering potential solutions. We are committed to working on a fiscal framework with local authorities, and we will progress that at pace. We are also committed to maintaining momentum on this issue. As an example of that, the appeals sub-group is being reconvened tomorrow to consider some of the issues that have been flagged.
I am delighted that the bill does a lot and delivers what ratepayers are looking for. Failure to support the bill tonight would deprive councils of policy responsibility for empty property relief, powers to prevent ratepayers from running up large debts and powers to tackle tax avoidance, including through phoenixing and the abuse of the small business bonus scheme and charity relief. The bill allows assessors to collect information that is necessary to set accurate rateable values and to allow them to resolve appeals more efficiently and effectively. It will support ratepayers and help them to be less exposed to the risks of volatility, inconsistency and a cumbersome and unresponsive appeals system.
The bill delivers the outcomes of the Barclay review of non-domestic rates. It supports growth, it improves the administration of the system and it increases fairness for ratepayers. For those reasons, it has the support not only of the Scottish Government but, more important, of the business community and local government. It has the support of Ken Barclay, and, at decision time tonight, I hope that it will also have the support of the Scottish Parliament.
5 February 2020
Final vote on the Bill
After the final discussion of the Bill, MSPs vote on whether they think it should become law.
Final vote transcript
The Presiding Officer (Ken Macintosh)
I remind members that if the amendment in the name of Kate Forbes is agreed to, the amendment in the name of Rhoda Grant will fall.
The first question is, that motion S5M-20716.4, in the name of Kate Forbes, which seeks to amend motion S5M-20716, in the name of Murdo Fraser, on no case for tax increases or further cuts to public spending, be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Sturgeon, Nicola (Glasgow Southside) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Baker, Claire (Mid Scotland and Fife) (Lab)
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Bibby, Neil (West Scotland) (Lab)
Bowman, Bill (North East Scotland) (Con)
Boyack, Sarah (Lothian) (Lab)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Davidson, Ruth (Edinburgh Central) (Con)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Macdonald, Lewis (North East Scotland) (Lab)
Marra, Jenny (North East Scotland) (Lab)
Mason, Tom (North East Scotland) (Con)
McNeill, Pauline (Glasgow) (Lab)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Sarwar, Anas (Glasgow) (Lab)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Tomkins, Adam (Glasgow) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Abstentions
McDonald, Mark (Aberdeen Donside) (Ind)
The Presiding Officer
The result of the division is: For 58, Against 57, Abstentions 1.
Amendment agreed to.
The Presiding Officer
The amendment in the name of Rhoda Grant therefore falls. The next question is, that motion S5M-20716, in the name of Murdo Fraser, on no case for tax increases or further cuts to public spending, as amended, be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Sturgeon, Nicola (Glasgow Southside) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Davidson, Ruth (Edinburgh Central) (Con)
Finnie, John (Highlands and Islands) (Green)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Johnstone, Alison (Lothian) (Green)
Kerr, Liam (North East Scotland) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Tomkins, Adam (Glasgow) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Wishart, Beatrice (Shetland Islands) (LD)
Abstentions
Baker, Claire (Mid Scotland and Fife) (Lab)
Beamish, Claudia (South Scotland) (Lab)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kelly, James (Glasgow) (Lab)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Macdonald, Lewis (North East Scotland) (Lab)
Marra, Jenny (North East Scotland) (Lab)
McDonald, Mark (Aberdeen Donside) (Ind)
McNeill, Pauline (Glasgow) (Lab)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
The Presiding Officer
The result of the division is: For 58, Against 38, Abstentions 20.
Motion, as amended, agreed to,
That the Parliament notes that the Scottish Conservative Party’s proposals for additional resource spending and tax cuts would cost almost £1.5 billion; further notes that the UK Government has indicated that the Scottish resource budget will increase by £1.1 billion; recognises that £1.5 billion is greater than £1.1 billion; considers this proposal to lack credibility, and recognises that the Scottish Government will present a balanced budget on 6 February that prioritises wellbeing, tackling climate change, reducing child poverty and boosting sustainable economic growth.
The Presiding Officer
The next question is, that motion S5M-20705, in the name of Kate Forbes, on the Non-Domestic Rates (Scotland) Bill at stage 3, be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Dr Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Baker, Claire (Mid Scotland and Fife) (Lab)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Boyack, Sarah (Lothian) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Constance, Angela (Almond Valley) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Harper, Emma (South Scotland) (SNP)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Kevin (Aberdeen Central) (SNP)
Sturgeon, Nicola (Glasgow Southside) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Davidson, Ruth (Edinburgh Central) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Kerr, Liam (North East Scotland) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Rumbles, Mike (North East Scotland) (LD)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Tomkins, Adam (Glasgow) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Wishart, Beatrice (Shetland Islands) (LD)
Abstentions
Finnie, John (Highlands and Islands) (Green)
Greer, Ross (West Scotland) (Green)
Harvie, Patrick (Glasgow) (Green)
Johnstone, Alison (Lothian) (Green)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Wightman, Andy (Lothian) (Green)
The Presiding Officer
The result of the division is: For 78, Against 32, Abstentions 6.
Motion agreed to,
That the Parliament agrees that the Non-Domestic Rates (Scotland) Bill be passed.
The Presiding Officer
I propose to ask a single question on the five Parliamentary Bureau motions. If any member objects, please say so now. No member objects, therefore the question is, that motions S5M-20733 to S5M-20737, in the name of Graeme Dey, on behalf of the Parliamentary Bureau, be agreed to.
Motions agreed to,
That the Parliament agrees that the Health and Sport Committee be designated as the lead committee in consideration of the legislative consent memorandum in relation to the Birmingham Commonwealth Games Bill (UK Legislation).
That the Parliament agrees that Sarah Boyack be appointed to replace Rhoda Grant as the Scottish Labour Party substitute on the Finance and Constitution Committee.
That the Parliament agrees that the Rehabilitation of Offenders Act 1974 (Exclusions and Exceptions) (Scotland) Amendment Order 2020 [draft] be approved.
That the Parliament agrees that the Relevant Adjustments to Common Parts (Disabled Persons) (Scotland) Regulations 2020 [draft] be approved.
That the Parliament agrees that Beatrice Wishart be appointed to replace Mike Rumbles as a member of the Culture, Tourism, Europe and External Affairs Committee.
The Presiding Officer
That concludes decision time.
5 February 2020