Plan to cushion rates impact

non-domestic revaluation led to redoubled calls yesterday for Scotland's

early entry into the planned uniform business rates system for England

and Wales starting in 1990.

Ministers have given no definite date for a common UBR for the whole

country because of the need to harmonise valuation procedures north and

south of the border and estimates for its introduction vary from around

1995 to the end of the century.

The transitional scheme, which is principally aimed at helping

businesses in England and Wales where there has not been a revaluation

since 1973, will restrict rises in rates bills stemming from increases

in valuations to between 15% and 20% in one year depending on the size

of the business.

It was clear from yesterday's announcement that Ministers have learnt

from the experience of the last Scottish-only revaluation in 1985 when a

rescue package was rushed through to help those whose valuations had

increased by more than three times.

Labour's Scottish Local Government spokesman, Mr John Maxton, was

quick to claim last night that the move was really concerned with

''saving parliamentary seats in the south of England'' and would have

much less relevance to Scotland.

''It is time Ministers like Ian Lang and the Scottish Office took

positive action to get the two business rating systems into line,

otherwise for 10 years Scottish business is going to lose out.''

Until a uniform business rate was operating for the whole of the UK,

Scottish business would continue to be at a major disadvantage

particularly compared to the north of England, he said.

Similar reaction from both Scottish industry and the local authorities

should serve to remind the Government how great the strength of feeling

is that Scottish business will be further disadvantaged if Scotland has

to wait many years to join the English UBR.

The Confederation of British Industry in Scotland made it clear

protection schemes were no substitute for the swift introduction of a

uniform business rate for the whole of Britain.

CBI Scottish director Mr John Davidson took the opportunity to

emphasise again that rates formed an intolerably high proportion of

Scottish business costs and were ''an unacceptable burden.'' The CBI

believed the way forward was the introduction of a UK business rate as

soon as possible.

If the UBR was introduced on an England-only basis every Scottish

ratepaying business would face increased competition from firms south of

the border, he added.

A spokesman for the Convention of Scottish Local Authorities said:

''These announcements do nothing to bridge the gap between Scotland and

the rest of the UK with regard to compensation for the earlier

introduction of the UBR in England and Wales.''

He also pointed out that one person's compensation was another's loss

and Cosla would want to look closely at how the scheme was funded.

Under the scheme small businesses will be limited to a maximum annual

increase of 15% in real terms and no-one will be required to meet more

than a 20% rise in real terms in 1990 and beyond.

Small businesses are considered as those having a rateable value after

revaluation below #5000. Properties with new rateable values below #200

will be excluded from the phasing arrangements.

Commenting on the announcement Mr Bill Anderson, Scottish Secretary of

the National Federation of Self Employed and Small Businesses, said the

federation had already pointed out to the Scottish Office that some

areas in Grampian and around Inverness might face big rises this time

and were glad the Government had taken this on board.

Scottish Office Minister of State Mr Ian Lang stressed that the

protection for Scotland was identical to that being introduced in

England.

Referring to the wider continuing controversy over the disparities in

business rates north and south of the border, Mr Lang insisted the

introduction of the transitional scheme formed part of the broader issue

of reform of business rates.

''The phasing in in England of the combined effects of both the

revaluation changes and the new uniform business rate will enable

business rates there to move to their new levels gradually. In Scotland

we are making good progress towards harmony with the new system south of

the border on the same timescale,'' he added.

Mr Lang said he was particularly aware of the importance of small

businesses in the Scottish economy and of the particular difficulties

sudden change could pose to their viability. For this reason increases

in their rates bills arising from revaluation would be restricted to

15%.

Call for speed6