IGNORE THIS AT OUR PERIL

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BUSINESS RATES MUST BE SCRAPPED.

Or City and Town centres will be absolutely decimated and all the jobs involved will be lost.

I don’t know why politicians think they can just go on imposing more and more unwarranted taxes on business and ignore their effect on both the jobs and business markets.

The combination of Covid and the growth in internet sales have rendered high street businesses completely unprofitable.If they are to be expected to pay archaic business rates based on completely unrealistic valuations that bear no semblance to present day trading conditions, they will close. It really is that simple. As I write this another 4700 high streets jobs are under threat today as another two high street chains announce they are going into administration.

It not just the retail businesses that face widespread closures, all the associated business like cafes, restaurants, pubs, bakers, hairdressers are all directly affected as well, as these businesses are all heavily reliant on footfall and the failure of the flagship businesses guarantees that footfall disappears for everyone else as well.

Take Paisley, where I live. It used to have a bustling High Street, packed full of shops. Then along came Braehead and Silverburn, huge shopping centres with equally huge free parking areas. What was the local Labour Council response? They appointed a Roads Convener who didn’t drive and who hated cars, who introduced double yellow lines across the entire town and wiped out business after business. It’s quite hard to sell washing machines  or fridges if you can’t pull up your car to pick them up, bye,bye Paisley Electrics as but one example.

Prior to all this in the 60’s the Labour Council had awarded planning permission for a new shopping centre in the centre of the town which involved building over the river and erecting an East German style monstrosity that replaced buildings of considerable architectural merit. People were astonished at this decision. How was this possible? Did I mention the main investor in the East German style Centre was the Miners Pension Fund?

So while cities and towns all over the World were investing in creating waterfront, attractive shopping and leisure attractions, the Paisley Labour Party decided to make the river disappear in the centre of the town.

While all this destruction was going ahead, business rates for the survivors were being increased all the time. The opportunity to enhance the centre of the town was lost.

Here we are many decades later and the end game is sight. Unless rates are removed then the centre of my town and many others will remain a disaster. Many, many more jobs and businesses will disappear.

Now I understand that the market has changed and it’s not ever going to go back to what it was like before the internet, but there is a complete failure of politicians to understand that the surviving business in these town and city centres need help, not stupid taxes. Additional taxes puts them out of business and ends up with all their employees  losing their jobs. One more unrealistic tax that is being paid by an ever declining number of businesses as more businesses go to the wall. More empty shops beget more empty shops.

Politicians have been scared of doing anything, they are hiding the truth from the public. I know lots of business owners in Paisley. I know many of them had big arrears in business rates before Covid. The reason? To pay them would be to kill their business. It’s not evasion, it’s survival.

The solution is AGR, introduce AGR and replace business rates, Vat and a host of other business destroying taxes and you will see new life in the High Street as suddenly it makes economic sense to use the properties rather than leaving them empty. Jobs will be created and life and energy will be recreated instead of stagnation.

We have the powers to do much of this already, we should not hesitate. You can have as many new business rate revaluations as you like, it will make no difference, businesses, more and more everyday, cannot afford to pay them.

Step up Holyrood, or suffer the pain of a huge level of business failures and soaring unemployment. There is no time left to delay. You need to save them while some are still there. If they all close there will be gone forever. That is the real choice.

I am, as always

Yours for Scotland.

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28 thoughts on “IGNORE THIS AT OUR PERIL

  1. When business operators talk about ‘your job’ what they really mean is ‘my profit’. By controlling access to remunerative employment businesses are able to blackmail governments into prioritising the demands of profit-takers over the needs of society as a whole.

    Never trust any business operator who claims to be seeking more subsidies or reduced taxes in order to ‘save jobs’.

    Businesses fail because they are badly managed. Not because they are required to pay for the infrastructure and services on which they depend. Local and national government make a convenient scapegoat when managers don’t manage.

    Liked by 2 people

    1. With respect Peter that is utter rubbish. I don’t know your background in business but I have spent my life building businesses from scratch in three different countries. How do you keep people working in your business if taxes are not based on profit? Business rates do not consider whether the business can support the tax, the are levied without any consideration of ability to pay. They kill businesses….and jobs!

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      1. The problem with basing tax on profit is that businesses/business people can manufacture (sic) a situation whereby a thriving business can be technically trading at a loss. There are lawyers and consultants only too happy to facilitate it for them in any number of ways. Such as those that saw Trump only paying $760 (often $0) in income tax despite being a multi-billionaire.

        Cutting the revenue raising policies that finance public services to “help” business does not always, if ever, work out as planned. Such as the financial help given to North Sea companies when the oil price fell. The companies demanded taxes be cut or 70,000 jobs would be lost. They got their tax cuts …. but cut the jobs anyway. How many businesses in the High Street or retail centres would do the same. I think that is at least partly Peter’s point.

        Councils have to ensure they accrue enough revenue to pay for services. Whatever system is used, businesses doing things by the book would still have to stump up. Whether it’s Rates or AGR is largely superfluous. If they don’t pay, someone else will have to pick up their tab. Most likely those of us who cannot afford to pay consultants to get us off the hook.

        Ultimately, it’s not Rates that have killed the High Street. It is people’s preferred shopping habits. Initially shopping centres and then on-line. If they thrived, Rates would not be a problem. But they don’t, so they are.

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      2. You fail to address how we protect the survivors or are they all expendable and should join the unemployed. There is still a potential market but it must not be based on outdated valuations that bear no relation to today’s reality.

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  2. From personal experience, I have seen this happen to a town in quite a short period. Back in 2003, I was based at Faslane for one of the Joint Maritime Courses for a few weeks and at the time, Helensburgh was still quite a bustling wee toon, most likely from the number of Sailors that were still working at the base. With the decrease in military spending year on year and the reduction of the JMCs being conducted every year, it meant that the Ships were not going in to Port as frequently. So a decline in footfall meant a decline in the beachfront. I remember that there was two pubs that we frequented, The Imp(erial) and another which in my view had no business anywhere near that beachfront – Budhha Bar which would have definitely not looked out of place in any major city centre such was the pretentious character of the place (something that I love in certain pubs).
    When I returned to Helensburgh in 2009, no longer in the Navy but working for an Oil Services Company, I couldn’t believe how quickly the beach front had gone downhill. No more pretentious pub, restaurants had closed and all had been replaced with either charity shops or were boarded up. It really saddened me as I had enjoyed my time there over the month that I had worked there only 6 years earlier.
    When it came round to 2014 and we had Jabba Bailey lying through her teeth about the amount of jobs that would be lost, I knew for a fact that there could not be that amount of people working there because the number of military personal in the area was so reduced. The majority of personnel that did still work there most likely went home for weekends when not on Duty and or were retired from service and working as consultants at Coulport. Not the types to be out on a weekend being as lively as a ship’s company could be.
    Helensburgh could see those days again if and when we become independent, the SG commit to turning Faslane into our Military Base of Operations.
    I did read a quite lengthy article a couple of monthst ago where Chris McEleny and A.N.Other outlined their strategy for the Scottish Defence Force which if implemented would create far more jobs than any of those associated with “Melt your face off weapons”.
    I have had thoughts on whether it may be better to turn Rosyth into a container port for Europe as it has reasonable links to the rest of Scotland already but there is no reason why the same could not be done at Montrose or Peterhead albeit at smaller capacity. For instance, due to location, Peterhead could become the hub for all Speyside Whisky exports globally.
    I seem to have gone off on a tangent there but I still feel sorry for the people of Helensburgh and the many other towns that have suffered the same fate.

    Liked by 2 people

  3. I am caught in the Middle here! I was a Senior Manager at Amazon Gourock and in there Amazon employs Hundreds!
    And with the Closure of IBM Amazon came along and saved Hundreds from a Life on the Dole!
    But I Do agree that in a Free Alba that if Amazon refuse to pay a Fair Amount of Tax to Holyrood then I Would Kick them out of Both Gourock & Dumfermline, And Block their Internet signal!
    I live in Paisley but I’d rather Shop in Silverburn than either the Decrepit Paisley Town Centre or the Manic Braehead!

    Liked by 1 person

    1. Decrepit Paisley Town Centre became so because..

      I’m from Glasgow but live in and operate(d) a small business in Paisley. I have a couple of elderly customers who were originally from Paisley but who’ve lived in England most of their adult lives. When they ‘come home’ to Paisley and we get the chance of a natter, independently of each other they both utter the same war-cry; “Paisley’s not the same” and bemoan the High St as soulless etc, etc. I’ve heard it a few times over the years.

      I have a very smart, olive-coloured jacket keeping my upstairs wardrobe warm and which I refuse to throw out or give away. I bought that jacket almost 20 years ago (that style will come back..) when I discovered, and rummaged through, an Arnott’s in Smithhills St in the Paisley town centre. That Arnott’s is long gone. They’re currently throwing up some flats on the ground it stood on, where the building was for god knows how many years.
      I honestly can’t remember the last time I was in either Braeheid or Silverburn; nothing against those comfortable and dry, indoor monstrosities, but surely, when they were regenerating brownfield sites they could’ve had a Plan-B that would ensure the centre of Paisley would maintain the natural and unique charm it enjoyed in its heyday?

      Another involuntary and recent example of civic charm would be when I wandered up the off ramp of the Forth & Clyde canal, just a couple of weeks ago having left the cycle path running alongside the canal, and emerged onto ‘Cowgate’, in Kirkintilloch. I’ve driven along Cowgate many times but had never seen it. The Cowgate was bustling, an early evening joy, and as I described it in my notes, having a kind of ‘old German’ atmosphere, with a similar feeling and architecture – or Zeitgeist? – of one of those smaller German towns I’ve visited in the past, especially during Autumn. I don’t see many of those beautiful, old German towns hacking-down their heritage to accommodate a block of flats.
      If all our Paisleys are to continue to serve citizens and generate revenue and maintain their old-style natural charm then we need to govern smart; Vorsprung Durch Technik – leap ahead through technology – shouldn’t also mean ‘während wir unser Erbe zerstören’ – while destroying our heritage.

      Liked by 3 people

  4. It’s great to see Iain place Annual Ground Rent ( aka Land Value Tax) firmly on the agenda . It’s a subject being studiously ignored or sidelined by SNP party management . The party has “insourced” such matters to its land commissioners . There are plenty of advocates of AGR in the SNP ( foremost is Graeme McCormick , available on YouTube ) . Let’s hear more from them , get them past the agenda gatekeepers and onto the conference platform .

    Liked by 3 people

      1. But what is the answer to the Unfairness of AGR to those who have Large Gardens?
        I favor a Local Tax System which doesn’t penalize those who are Asset rich But Cash poor!

        Like

  5. The AGR has potential. But like all these things the devil is in the absolute detail.

    What classes of land tax would there be. What would the band charges be. Would the rate for an area of someone’s roof be the same in central Edinburgh as the rate for an area of roof in Portree.

    Or what would the rate be for a bungalow as opposed to a tenement where multiple storeys share the same roof.

    Or what of the rate for prime agricultural land, meadow, root crop, fruit or cattle. Would these be at different bands. And what of hill or mountain areas. What rate for them. And could the Cairngorms be the biggest contributor of rates in all of Scotland , whilst the Brae head mega shopping centre pays infinately less.

    Or what in relation to people of very low incomes or very high incomes would they pay the same. Or what of people with big gardens, sheds, garages, or workshop’s.

    Or what of the revenue that AGR will levy. Area by Are. How will it relate to council areas or will it be a national tax. And what of the VAT that it might be set to replace. Vat is currently a Westminster tax – and what of the economic impact of VAT removal. How will AGR replace VAT income, or even income tax as has been suggested.

    Making the mountains pay may seem attractive but I have my doubts about that.

    But yes AGR has potential However no one seems to be addressing the detail and therein may lie the problem why it doesn’t appear to be gaining any traction _ and it would certainly be helpful if this could be better addressed.

    Maybe then it might attract more interest as opposed to the current situation where currently it is largely being ignored.

    Liked by 1 person

    1. Willie , it’s not a property tax in the sense of a tax on buildings that’s being proposed but a tax on the increased unearned income from the value of the land . Most models of AGR project that householders would pay less under such a scheme than they presently pay in council tax . As to the spectre of highland lairds being land taxed out of existence , we should remember that some of the largest landowners are foreign nationals paying land tax to their native treasuries whilst getting off Scot free here .

      Liked by 1 person

      1. Brian, I fully appreciate the complexion of land ownership in Scotland and the foreign ownership of absolutely huge tracts of Scotland. Something is long long overdue to redress this and AGR could, as could re-rating, be used to change this.

        unfortunately the current SNP leadership appear absolutely resistant to any form of change including breaking up the large estates or bringing them into better national interest use.

        Its interesting that you say that most models project that householders would pay less and this is interesting since if the tax was predicated on roof area some folks in let us hypothesise very expensive multi story apartments would pay next to nothing pro rata to the share of the roof. Maybe this is the desired effect of AGR and if so it would certainly be a driver for high rise living.

        Then of course there would be the inequity of the retired bungalow dweller who maybe living alone would being paying much more than the penthouse dwelling executive. Again. maybe the intended effect of the AGR.

        But in turning to the large tracts of land and country estates owned by Johnny Foreigner soaking them might certainly have the effect of making them sell up. But what then. With householders all paying less, and with Johnny Foreigner sold up. where is the rating shortfall now going to come from.

        And what of the Braehead shopping centre. Or what of the diamond, gold and expensive watches Arcade off Buchannan Street. Will their peppercorn pro rata roof area levy make up the deficit. but these are the questions we need to ask, to consider, to model.

        Superficially. the cut everyone’s rates whilst making the Lairds pay sounds good but how will it work. Devil and detail.

        But I do not come to argue against AGR. It needs to be considered more. Indeed, there those who would argue for flat rate taxation where every citizen pays the same. Certain ex communist countries have gone down that route but I digress. AFR we need detail and debate.

        Liked by 1 person

  6. Yes, and whilst we are on the matter of AGR does anyone remember the SNPs commitment to reforming the unfair rates.

    Voted down by the opposition in the then minority Salmond government subsequent SNP majority governments have now ditched any commitment to rate reform.

    But with economic advisers like Benny Higgins of the Duke of Bucleuch’s Estates, maybe this is of no surprise.

    More establishment than the establishment if I may opine.

    Liked by 3 people

  7. My book, AGFRR ( Annual Ground Floor and Roof Rent) will be published within the next two weeks. Orders can be made from next week. It costs £10 including post and packing. It explains in detail exactly what every owner will pay, how it can’t be avoided, how it can replace all existing taxation and how about 98% of owners will pay less than they pay at present.

    Liked by 2 people

  8. I’ll certainly be sending off for a copy of your book Graeme.

    The idea of how all taxation can be replaced by one tax and how around 98% of owners will pay less than they pay at present sounds absolutely revolutionary.

    Well worth a tenner. The idea of nearly all of us paying less than just now with the 2% picking up everything else sounds absolutely fantastic.

    Tax in this country is truly unfair at present, and optional in fact for the very rich.

    Liked by 2 people

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