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Last Updated: Thursday, 6 October 2005, 16:33 GMT 17:33 UK
Timetable for business rate cuts
Finance Minister Tom McCabe
Tom McCabe said the cuts would give Scots firms a competitive edge
Business rates are to be cut to the level of those in England in time for the next Holyrood elections.

Finance Minister Tom McCabe confirmed the timetable in a statement to the Scottish Parliament.

He earmarked 100m in 2006 to halve the gap between the countries and said 180m would be spent the following year to bring the rates into line.

Mr McCabe said Scottish firms would have a competitive edge. CBI Scotland praised the announcement.

However, opposition leaders urged the minister to introduce the cuts immediately.

By April 2007 the policy is expected to cost about 200m a year.

The minister also pledged to consult on plans to create further rate incentives for research and development.

A successful economy is a vital pre-requisite for first class public services and building a Scotland in which opportunity exists for all
Tom McCabe
Finance Minister

He said both moves demonstrated the Scottish Executive's determination to grow Scotland's economy.

"A successful economy is a vital pre-requisite for first class public services and building a Scotland in which opportunity exists for all," he added.

The minister said businesses lobbying for the cut had a responsibility to use the "competitive advantage" it offered them to boost economic growth.

Mr McCabe went on: "As a result of our policy of limiting rate increases to inflation or below, the rates burden on Scottish businesses, relative to England, have been falling over the last five years.

'Competitive edge'

"Taking these factors together with the new lower poundage rate means that businesses here will now have significantly reduced operating costs and that will give them that all-important competitive edge."

Scottish National Party finance spokesman John Swinney said the minister should admit that with his decision to cut rates, the executive had removed more than 800m from Scottish businesses in higher business rates since 2000.

The Scottish Conservatives said the cut in business rates could not come soon enough.

However, Murdo Fraser, the party's enterprise spokesman, said: "Now the executive has finally accepted a reduction is necessary, what possible justification is there for making us wait for a staggered introduction of parity with England?"

Green MSP Mark Ballard said the 180m could have been better spent on supporting research and development, or in areas like renewable energy.

Frances Curran, of the Scottish Socialists, said the executive should have used the money to finance the 174m required to fund free school meals for children.

'Poor track record'

The Scottish Trades Union Congress (STUC) said it was concerned about how the impact of the business rate cuts would be monitored.

Assistant secretary Stephen Boyd added: "The STUC hopes, as the minister does, that business will now choose to invest.

"However, we also note the very poor track record of Scottish business in this respect despite years of macroeconomic stability and low interest rates."

First Minister Jack McConnell surprised business leaders when he announced a reduction plan last month.

The timetable announcement coincided with a SNP debate on the economy on Thursday, where nationalists challenged Labour to demand more tax cutting powers for Holyrood.

The rate cut, proposed by new Scottish Lib Dem leader and Deputy First Minister Nicol Stephen in his summer campaign to replace Jim Wallace, saw the coalition parties vying to claim credit for the move.

Stephen pledges business rate cut
20 Sep 05 |  Scotland
Business leaders rebuke executive
09 Sep 05 |  Scotland
McConnell vows business rate cut
06 Sep 05 |  Scotland


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