Official Report 1247KB pdf
The next item of business is a debate on motion S6M-19948, in the name of Ivan McKee, on the Non-Domestic Rates (Liability for Unoccupied Properties) (Scotland) Bill at stage 3. I would be grateful if members who wish to take part were to press their request-to-speak buttons now.
18:01
We are here to rectify a legislative error in the Non-Domestic Rates (Scotland) Act 2020. I welcome the Parliament’s recognition of the importance of addressing the issue swiftly through agreeing to the emergency bill process, and I hope that, come decision time, members will support the bill.
As we know, a technical error in the 2020 act means that amendments that were intended to devolve empty property relief did not have the intended legal effect, so we need to ensure that there is a clear legal basis for charging rates to the owners of unoccupied non-domestic properties. Without primary legislation to make clear the position regarding empty properties, rates paid since 1 April 2023 by owners of unoccupied properties could require to be refunded, and rates might no longer be able to be collected on unoccupied properties should local authorities decide that that is required. The bill is therefore necessary to bring the statute book into line with the Parliament’s intention to devolve empty property relief to local authorities and allow local authorities to levy rates on the owners of unoccupied properties.
If the bill is not passed, those who paid rates on unoccupied properties could receive an unexpected and unjustified windfall, which would require cuts to public spending or, if that loss were compensated for in the non-domestic rates system, an increase in rates or a reduction in the generosity of reliefs in future. Accordingly, the bill is vital to protect public finances at a time when, more than ever, every penny counts.
I move,
That the Parliament agrees that the Non-Domestic Rates (Liability for Unoccupied Properties) (Scotland) Bill be passed.
18:03
The bill will pass, but it will not pass with our support. In all likelihood, this rushed legislation will not fundamentally fix the problem that the Government has created. The disastrous drafting blunder in the Scottish National Party’s original legislation could still leave the Scottish Government and Scottish taxpayers picking up a compensation tab of anything up to £400 million. That is a risk of losing £400 million, which is not a molehill, as Mr Mason implied in an intervention during stage 2. That loss would be a scandal, and I agree very much with the points made by Stephen Kerr in respect of that.
The bill has gone through a rushed process and is trying to fix a problem that arose because ministers did not do their job properly the first time round. If ministers are confident that they can apply the tax retrospectively and that it will be legal and not subject to challenge, they could have taken longer to frame the bill in public, get it right, consult and work on a cross-party basis to take evidence and listen to the received responses. The Government could have taken the time to ensure that no further issues could arise, such as some of the unintended consequences that we have seen since the tax was applied to empty properties. The manner in which the minister has managed it leaves a lot to be desired.
We have to be concerned about the Government’s attempts to shut down scrutiny. That will not work. I think that I will take up Mr Leonard’s request to issue a press release or two off the back of this, and we will be asking tough questions that ministers clearly do not want to answer in this chamber or elsewhere.
For example, despite the Government being made aware of this enormous error in June, we are led to believe by the minister that he only found out yesterday that the case was active in June. I simply cannot believe that the Government’s decision-making matrix would allow something as potentially significant as this situation to have continued for nearly six months.
Today, ministers rejected a number of amendments that were designed to be helpful—they would have helped the minister out of a hole by allowing greater transparency about what went wrong. In rejecting those amendments, ministers have shown their usual contempt for openness and accountability.
However, my single biggest concern is one that was eloquently put by Murdo Fraser yesterday: it is the likelihood of the bill ending up in the courts. When the Government votes to pass the bill in a few moments, ministers will not be able to say that they were not warned of the risks of a legal challenge. The Scottish National Party Government has not provided us with evidence this week that the emergency bill will work and that it cannot be challenged in the courts. Already, constituents have told me that they are in discussion with lawyers or with the Scottish Property Federation to see whether a case can be brought against the bill. Given some of the answers that the Government has provided, including in some of the briefings, I think that there is now a higher chance of legal challenge. Those who believe that they have been wrongly paying the tax will drag the Government to the courts, and I simply do not blame them.
We have to reflect on the Government’s track record of defending its legislation in court, from Nicola Sturgeon’s proposed independence referendum bill to the bill on gender self-identification. Those examples do not inspire confidence. Let us look at the list briefly. The Children and Young People (Scotland) Act 2014, the named persons scheme, the United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Bill, the Gender Recognition Reform (Scotland) Bill and the European Charter of Local Self-Government (Incorporation) (Scotland) Bill were challenged in the Supreme Court, and the proposed independence referendum bill was ruled outwith the devolved competence by the Supreme Court, even though the Presiding Officer deemed it possible to bring that bill before the Scottish Parliament.
What we are being asked to vote for today is bad legislation. It is rushed legislation. It is legislation that could well be challenged in the courts, with all the costs and the uncertainty that that would cause. I note that the minister did not support Jeremy Balfour’s amendment 1.
I said to your colleague in my contribution at stage 2—
Through the chair.
—that the certificate of legislative competency was not a guarantee. I also said that, frankly, any legislation can be challenged in the courts.
I accept that point. I also took on board Stephen Kerr’s point that, in effect, there would be an additional guarantee had we passed Mr Kerr’s amendment 14.
There is a huge amount of uncertainty around this legislation. It is uncertainty not just for the Government, but for those who are paying rates and for councils. It is uncertainty that could do further damage to the commercial property market.
For all those reasons, the Scottish Conservatives cannot support the SNP’s emergency legislation. It is bad legislation, and I suspect that there is a significant legal challenge to come.
18:08
I will support the bill, because I recognise the importance of correcting the error that has arisen and the seriousness of the potential consequences if Parliament fails to act.
The bill is, in essence, a targeted intervention to rectify a specific legislative error, which is small in appearance but profound in financial consequence. The mistake, frankly, should never have occurred, but had it not been identified—seemingly by a quirk of fate—it could have resulted in the people of Scotland being left with a liability of approximately £350 million. To put that into perspective, £350 million is almost half of the £820 million that, according to the Chancellor of the Exchequer, was secured by Anas Sarwar for Scotland from the United Kingdom Government this week. [Interruption.] We might be hearing chuckles and laughs, but that is not a trivial sum. It represents resources that could and should be supporting public services, not cleaning up a Government mess.
Is the £820 million Barnett consequentials or is it on top of Barnett consequentials?
That is £820 million secured by Anas Sarwar for Scotland, which we hope to see spent properly and not wasted on things such as, potentially, a £350 million bill if we do not fix this mistake.
I disagree fundamentally with the Scottish Conservatives’ contention that it is not the role of Opposition parties to correct Government mistakes. We take our responsibilities as elected members seriously; we are here to serve the people of Scotland. It is the people of Scotland who stand to lose hundreds of millions of pounds because the Government has failed to check its own work, so it is absolutely our duty to intervene.
We have listened carefully to the Government’s explanation of the procedural circumstances that led to this situation. In due course, there will be time for the Government to account for what went wrong, how it went wrong and why such an error was allowed to persist unnoticed. It may well be appropriate—or, I would say, necessary—for the Government to offer an apology to the Parliament and to the country for its failure to identify the issue sooner. In the months ahead, there will be ample opportunity to scrutinise the wider catalogue of errors and mismanagement that has accumulated over 18 years of SNP administration: missed amendments, wasted millions and repeated failures in governance.
However, today, our responsibility is clear. It is to prevent an unnecessary and harmful cut to Scotland’s public finances or a corresponding increase in tax. We acknowledge that, like all legislation, this bill may be open to legal challenge, but the risk of challenge is substantially outweighed by the immediate and pressing risk of a £350 million refund.
Although we support the bill, we cannot accept the circumstances that necessitated its introduction. The Government must reflect on how many more critical errors the Parliament will be required to fix before it accepts that it has reached the end of the road. I would ask the Government not to place the Parliament in this position again, but experience suggests that that might be in vain. If the Government cannot competently manage its own financial and legislative responsibilities, it should step aside for those who can, before lasting damage is done.
I call Lorna Slater.
18:12
Thank you, Presiding Officer. I do not intend to use my full time.
The Scottish Greens understand the seriousness and urgency of this legislation and are content to support the bill at stage 3.
18:12
I am grateful to everyone across the chamber for coming together to pass this legislation at pace. I do not have much to say other than that the bill is fundamental for the non-domestic rates system to function as intended by Parliament and for councils to have the powers to levy rates on the owners of unoccupied properties, subject to any local relief that they may wish to offer backdated to 1 April 2023. I thank all members for their time to consider the bill.
That concludes the debate on the Non-Domestic Rates (Liability for Unoccupied Properties) (Scotland) Bill at stage 3.
Air adhart
Motion without Notice