Perth: how tax and regulation can strangle a proud city

Perth: how tax and regulation can strangle a proud city

by Marcus Buist
article from Tuesday 18, November, 2014

LIKE MOST small ‘c’ conservatives, I am naturally inclined to be defensive of my home town. Indeed, it is hard to talk about home without lapsing into a VisitScotland style effusion. So when Perth was derided by STV in a recent news article as “the town we must pretend is a city, a slate-grey, charity-shop studded conurbation left behind by the financial thrust of Edinburgh and the cultural vibrancy of Glasgow”, I was more than a little miffed. 

This does not mean, however, that times have not been hard for the city and its wider area. The GMB Union estimate that between April 2008 and November 2013, real average earnings fell by some 22% across the local authority. Whether or not this is true, it would be hard to claim that the closure of so many shops has not been dramatic and deeply unpleasant for all concerned. Just as important to note, many of these business were not failing businesses, but viable concerns forced out of the market by the ineptitude of the local council and Holyrood. 

The rates bill, for instance, continues to rise, despite much trumpeted relief schemes. The revenue raised across Perth and Kinross in 2013-14 is expected to amount to some £52 million; against this, a package of small business relief worth just over £6 million seems pretty small fry.  As a fixed charge based on outdated property values, few taxes can have higher deadweight cost to business than the rates. The vacancy rate for the city centre still stands at over 7%, and where properties have been brought back into use, many have been either the charity shops mocked by STV, or else low-budget chains. Making the problem worse, the rate of taxation, termed poundage, has risen from around 40% to 46%. To claim this is no worse than what is happening in England can no longer be allowed to cut any ice. Scotland, despite her wealth, has fewer businesses as a share of population than any part of the UK bar the North East of England. A significant cut in rates, before eventual abolition and replacement is by now keenly needed. 

Equally significant, there must now be real attempts to bring licensing and regulatory laws back into line with common sense. Often badly conceived, bizarre rules are made worse by the vindictive behaviour of council officers determined to throttle small businesses out of existence. In Perth, plans to demolish the City Hall (pictured), a move backed unanimously by councillors of all parties, demonstrates that a lack of imagination can go hand in glove with a lack of concern for businesses disrupted by skips, lorries and workmen. 

While in Edinburgh, a true horror story emerged of a small sandwich bar bullied by council officers, who at first demanded the seating removed along with the fryer for chips, and the two sandwich grills despite earlier approval. After the intervention of a councillor, officials decided that only the fryer and one grill need go, but this still raises the question: what does this have to do with council officials at all? If our health is not threatened through poor hygiene, what business should officials have in re-interpreting already stringent rules? 

Liberalisation and vision are needed to change this. Access to parking spaces, permission for more and better family homes, simpler planning rules, lower taxes for small businesses and employers, and private initiatives to back start-up companies can all show that radical reform is possible. Then, when all this is done, let no one have such a brass neck as to describe Perth as anything but the Fair City of Scotland.  


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