 The next item of business is a statement by Derek Mackay on response to the report of the Barclay review of non-domestic rates. The cabinet secretary will take questions at the end of his statement, so there should be no interventions or interruptions. Cabinet secretary, 15 minutes are there abouts please. Thank you, Presiding Officer. Three weeks ago today, Ken Barclay published his report into the non-domestic rates in Scotland. He and his team of Professor Russell Griggs OBE, Isabelle Dynverno, Nora Senior CBA and David Henderson produced a third report, and I wish to take this opportunity to convey my thanks again to them and commend them on their contribution. As members will recall, I said when I received the report that I would respond quickly. Last week, the First Minister set out in the programme for government that we would immediately take forward four of the recommendations from the Barclay review. Those were to hold more regular evaluations, introduce a new relief for day nurseries, expand fresh start relief to create a greater incentive to bring empty properties back into economic use and to review plant and machinery evaluations. A key matter is the frequency of evaluations. I agree with Barclay of the need for more regular evaluations, and, as the review suggests, after the 2022 revaluation, it will take place every three years. Crucially, we will also ensure that the tone date will be brought forward from two years prior to one year. Combined, that will help to ensure that our rating system is more flexible to the changing economic circumstances that businesses face and reduce the large shops such as those experienced by some earlier this year. I propose that the new relief for day nurseries will commence on 1 April 2018 and will be a full 100 per cent relief. Scotland has always been a leader in education and childcare, and this is the first relief of its kind anywhere in the UK. Fresh start, a relief that I introduced in 2013, will also be expanded from 1 April. I accept to Barclay's proposal that the relief should increase from 50 per cent to 100 per cent for the first year of new occupation and should be available after a property has been empty for six months rather than the current 12. Those are suggested to help to bring empty town centre properties back into use. However, to stimulate the whole economy and reduce the number of properties sitting vacant, I will go further still and make relief available for all types of property, including industrial property. The Barclay review of plant and machinery will commence shortly, and I will ensure that this fast-tracks the valuation of hydro schemes, as I believe an early look at this area, is essential to secure inward investment in Scotland. Following on from the swift acceptance of those four recommendations last week, I will now outline my fuller response to the chamber. That has been informed by a number of meetings that I have held with a range of organisations since the publication to discuss the report and how it should be implemented. It is a measure of the importance that we place on the economy that we commissioned the Barclay review in the first place. The Barclay report made 30 recommendations to boost economic growth, improve administration and increase transparency and fairness, and they did so within their remit of revenue neutrality. Turning to those recommendations not covered by the programme for government, I can confirm to the chamber that it is my intention to move now to implement the vast majority of them, subject to any legal or regulatory considerations, the budget process and, of course, the will of Parliament. We will consult further on some before taking a final decision before the end of the year. I will now turn to the first and the flagship recommendation made by Barclay, the business growth accelerator. Of all the recommendations, the Barclay review felt that that would give Scotland the edge in attracting investment in growing the economy. I agree. Developing our economy and supporting business to invest and grow is central to this Government's activity. I accept that recommendation and will include it in the draft budget for 2018-19. I am firmly of the view that that will give Scotland's businesses a competitive advantage and provide the economy with a welcome boost. However, in that crucial recommendation, I want to go beyond Barclay. From 1 April next year, I will ensure that every new-build property does not pay a single penny in rates and till it is occupied for the first time. I have met the assessors and they have agreed to the principle of delaying the entry of new property on to the valuation role. I will also withdraw the 2009 completion notice guidance issued to finance directors. I urge the business community and developers alike to consider precisely what that means. A new-build property will not pay rates until it is occupied and then your tenant will then benefit from a one-year without rates throughout the growth accelerator. That means that, combined with the more favourable rates of LBTT on commercial transactions, that will mark Scotland as the most competitive place in the UK for business to grow and invest. Of the other 19 recommendations, I will set out our position on each. I note that Barclay concluded that the large business supplement should be reduced to £1.3 and, over the course of this Parliament, I will do so should it become affordable and will consider that in future years budgets. Barclay made a number of recommendations about the provision of information and standardised billing, and today I issued invitations to stakeholders to sit on an advisory group to inform some of the administrative reforms. Long term, or longer term, this group will also feed into the development of online billing. I agree with Barclay that transparency over how relief is awarded will also help to improve understanding, and so I accept recommendations to publish data on which properties are in receipt of relief. The Government is committed to the small business bonus. However, as recommended by Barclay, a review will be undertaken of the scheme to ensure that we maximise the economic and social benefits of the scheme. Barclay recommended that, at a number of areas where the assessors need to improve their service and having met the Scottish assessors association last week, it can confirm action to address this is already under way, and I have asked them to present me with their implementation action plan by the end of this month. Rape payers must also play their part in improving the system, and they need to provide assessors and councils with the necessary information that they need to do their job, and so I accept recommendations to create new civil penalties. If the information going to the system is better, that should mean that valuations are more accurate and reliance on appeals should reduce. I also agree with the principles that should underpin the appeal system as those move into Tribunial Scotland in 2022, and I agree that the appeal system should allow rateable values to be corrected upwards as well as downwards from that point onwards. And councils also need to improve the service that they offer, and I will remind them of the need to issue prompt payments to rate payers. Debt recovery for both local taxis, council tax and non-domestic rates need to be brought into line with each other, so the time for rates debt recovery will be brought forward. This Government is committed to reducing tax avoidance, and where we have control we have taken steps to do just that. I welcome the Barclay recommendations to close off specific known avoidance tactics and the creation of a general anti-avoidance rule to help future proof the rate system by closing off loophalls and avoidance tactics that may emerge over time. Shorter term, a commercial rateable value finder product will help ensure all property that should pay rates does pay rates. Errors may also occur in the award of relief and with immediate effect, Scottish Government will initiate administrative checks of the various data that it receives for errors. After engaging with stakeholders, I believe that a small number of recommendations merit further thought and engagement. This is entirely in keeping with the recommendation number eight of Barclay, that wherever possible the Scottish Government should consult on changes to the rate system in advance of those being implemented. Those recommendations that require further consideration and engagement are those that remove charity relief for certain recipients, including allios, independent schools and accommodation by universities, reform of relief for sports clubs, empty properties and properties in active occupation and the levying of rates and parts. On each of those areas, I will continue engagement to fully understand the impact of and any wider implications and possible unintended consequences in each of those areas. Before outlining my position in the implementation plan, I proposed to publish later this year. Those issues will each be considered individually and the most appropriate route forward taken for each. Finally, there are two recommendations that I have decided not to take forward at this time. I will not progress the option to put farms on evaluation role and to levy rates on commercial agricultural processing. That would create a significant administrative burden on the assessors at a time when their focus must be on improvements to the service that they provide and the move to more frequent re-evaluations. More importantly, in not taking those recommendations forward, I want it to be clear to this sector that the Government recognises the invaluable contribution that it makes to our economy. My message to business after announcing this package is clear. Come to Scotland, invest in Scotland and grow your business in Scotland. Today, I publish a full response to the Barclay report, and I commit to a full implementation plan before the end of 2017. As members will be aware, there are a range of actions that are required to enact the recommendations that are accepted. Before I close, I want to take this opportunity to announce that the cap for offices in Aberdeen city and Aberdeen shire and all but the very largest hospitality properties will continue next year with an additional 12.5 per cent cap in real terms. I also encourage the sector and assessors to work together to explore alternative methods of valuation. Additionally, until such times that the review of hydro plant and machinery valuations has concluded and any recommendations are implemented, I will offer a 60 per cent new relief for hydro schemes from 1 April 2018, subject to an upper value threshold. That Government leads and innovates when it comes to using the limited powers at our disposal. Today, I am using those powers to create a fairer, more transparent rate system that better supports economic growth. That statement outlines the Government's position on the Barclay review, the recommendations that we will take forward and the additional measures beyond Barclay that I have announced today demonstrate our ambition for the economy and our desire to work with the business community to deliver upon that ambition. Once implemented, we will have a rate system that is fairer, more responsive and geared for growth. I commend that statement to the chamber. Thank you, cabinet secretary. The cabinet secretary will now take questions on the issues raised in his statement. I intend to allow 30 minutes or so for questions after which we must move on to the next item of business. It will be helpful if members who wish to ask a question were to press the request-to-speak buttons now. I call Murdo Fraser. Thank you, Deputy Presiding Officer. I start by thanking the cabinet secretary for his statement and for advance sight of it. I would like to join him in thanking Ken Barclay and his team for producing their report, which gives us all much to consider. A great deal of what the cabinet secretary has announced today, we would agree with. Can I welcome in particular the move to three-year evaluations, the standardisation of bills, the new relief for day nurseries and the new exemption for hydroschemes? I also welcome the proposals to exempt from rates empty new-build properties and the indication that there will be a reduction in the large business supplement. Although I would gently point out to the cabinet secretary that what he is doing here in both those cases is simply reversing damaging policy choices made by his predecessor, Mr Swinney. I have two specific questions for the cabinet secretary. Firstly, the cap on increases for hospitality premises and offices in the north-east is stated to be an additional 12.5 per cent in real terms for next year. For the avoidance of doubt, can the cabinet secretary confirm that this figure is cumulative with this year's cap, meaning that the business that is affected will be facing increases of up to 30 per cent or so over a two-year period? Secondly, I note that the cabinet secretary is keeping alive the possibility of ending rate relief for sports clubs and local authority arm slents organisations that run swimming pools, gyms and leisure centres. A measure that I have pointed out before would undermine Scottish Government policy in encouraging active lifestyles and tackling obesity. Why won't the cabinet secretary join with us today in ruling out the damaging SNP swim tax? I'm now not surprised that the Conservatives didn't submit evidence to the Barclay commission and when challenged also didn't submit any thoughts after publication for me to consider in advance of today's statement in fact the only political party in this chamber that took it seriously was the Green Party who offered suggestions. So it would appear once again that the Conservatives, other than welcoming a range of actions that I've committed the Government to and a welcoming you, welcoming so much of what I'm proposing today, but the Tory party is bereft of their own ideas as to how to improve the rates system. I can only imagine how depressed Murdo Fraser was when he read my statement and realised what a fantastic package we were putting forward for Scotland. In terms of the questions that I've been asked, two specific questions. First of all there are areas that I've said requires further consideration and allios and sport clubs are in that category of requiring further consideration engagement and keeping with what Barclay has recommended to engage further on that and absolutely that's what I'll do because the Government has certainly moved very swiftly on this issue but I think it's appropriate to take the time to get it right but you see once again the Conservatives are arguing for more spending and tax cuts at exactly the same time showing their economic mess that they don't understand what is before them. In terms of the requests around the hospitality sector and the cap that I proposed for the north-east by way of offices, I have had correspondence from both the hospitality sector and the north-east and when asked what feels like a fair increase recognising the recommendations of the assessors who are independent of Scottish Government but Scottish Government intervened to place a cap on the increases in the hospitality sector and also for the north-east, that 12.5 per cent real terms cap was welcomed by that sector and certainly that part of Scotland and both the chamber of commerce in the north-east and the British hospitality association and in terms of the hospitality request felt that a further and additional cap of 12.5 per cent would feel fair and that's exactly what I'm proposing today. Jackie Baillie, can I welcome much in the cabinet secretary's statement and the Barclay recommendations in particular exempting children's nurseries, something suggested by my Labour colleague Daniel Johnson and indeed the relief for hydro schemes, which will help potentially projects in my constituency. At the start of the review, the cabinet secretary said that it needed to be revenue neutral. Today you've announced measures that I believe are well in excess of £55 million but you've given no indication of revenue-raising measures so is it still revenue neutral and do you therefore anticipate the gap being taken up by sports clubs, local authority arms length organisations and others? Secondly, I do welcome the extension of the 12.5 per cent cap but it is the case that businesses are still struggling. Business organisations tell me that local authorities are managing the cap in very different ways. Some are manually adjusting the bills so the cap applies immediately. Others insist that they apply for a rebate and that takes time and businesses in the meantime have to pay in full all their rates. That is also true for those caught up in the appeals system. Will the cabinet secretary therefore take practical action now so that businesses fully benefit from the 12.5 per cent cap? I'm sure that Jackie Baillie and what could be characterised is quite a generous contribution. I'd point out that the Labour Party failed to submit anything to Barclay and failed to give me anything in terms of what was a priority coming forward. The Barclay review was commissioned before Daniel Johnson was a member, so that's some feat to be able to influence it before Mr Johnson was a member of Parliament. I think that the new relief for nurseries will be very warmly welcomed. There's very much in keeping with this Government's policy of supporting nurseries and the expansion of childcare provision. It's good going for the Government to receive a request from particular sectors, and by that I mean specifically a 12.5 per cent real terms cap and for the Government to agree to that. That's why we've been able to take a range of actions before, during and after revaluation to support businesses. I look forward to the response of the business community on the recommendations that I've accepted today, indeed going beyond Barclay and gearing for growth, our strategy going forward. In terms of revenue neutrality, it's correct to say that the remit of the Barclay panel was to be revenue neutral. The decisions that the Government takes will be taken in accordance with the budget and the negotiations that I have, so it will be for Parliament ultimately to approve the budget. However, what I'm announcing today is Government intention, and that will require parliamentary support. In that sense, I look forward to the positive engagement of all parties in the chamber, working with me to deliver a budget that delivers the recommendations that the opposition parties tell me their support. In that sense, it's a wee bit harder to do all the good stuff and not to tackle some issues for revenue raising. However, on those areas that I'm not progressing with today, as I've said before, I want to explore thoroughly to make sure that I engage and consult together at right and take into account the views of stakeholders, and that's what I've been doing since the publication of the Barclay report. I have 15 members who wanted to ask questions. The clue is in the word, questions, concise questions, please, and concise responses would be helpful. Mr Doris, followed by Dean Lockhart. I welcome the Scottish Government will consult ahead of any reforms of rates relief to allios. I would ask the cabinet secretary to approach any change, with great caution, to ensure that those using leisure facilities such as Glasgow Life do not suffer any unintended or detrimental consequences, but also to be similarly wary of any blanket exclusion of allios applying for sports club relief, which could have similar unintended consequences. I think that that was a question, cabinet secretary. Oh, it was too. Yes, Presiding Officer, I'll take the time to engage with people to make sure that we have a balanced approach on that and other matters. Dean Lockhart, followed by Gillian Martin. The cabinet secretary will be aware that a number of organisations have raised concerns about the methodology used to calculate rates in the hospitality sector. Something I reminded him about in writing only yesterday, rates in this sector are calculated... No, I want a question. Can the cabinet secretary therefore explain what substantive measures he will be taking to change the methodology used in the hospitality sector to calculate rates? Because the temporary sticking plaster of a cap does not address the underlying concerns raised by the SLTA and other leading organisations? No, you are being too cute there, cabinet secretary. First of all, let's see what the hospitality sector says about the package that I've announced today. I'm beginning to wonder if Dean Lockhart has read the report, or indeed understands that I can't direct the assessors in the fashion that he's described. It's a matter for the assessors to judge what methodology they use, but, yes, I do agree, and I've said this directly to assessors that they should consider issues of methodology, but no matter what, I'm proposing a cap for that sector nonetheless to support that sector as the issues of methodology are looked at to see if there is a better way to value those particular premises. I know that that will be warmly received by the sector, and assessors will engage in that in a constructive manner. Gillian Martin will follow by Andy Wightman. I am very pleased to hear about the transitional relief for the north-east, and it's going to be continued by the Government. The cabinet secretary will know that both Aberdeenshire and Aberdeenshire city councils have implemented local relief schemes. Will he join me in calling on both councils and ministrations to match the Scottish Government's commitment to the region with the continuation of those local relief schemes? Yes, I concur with that point. Under the Community Empowerment Act legislation, any council can devise any scheme that is appropriate to reflect local circumstances. Three councils have chosen to use those powers, and I would encourage all councils to look at those powers to see what else is appropriate for local circumstances. However, for those areas that I have delivered a local scheme, I would encourage them to continue with that, especially in view of the commitment by the Scottish Government to continue with the support that we have announced today. Given the remit of Barclay review and the fact that it asked only one question, does the cabinet secretary agree that such a narrow remit and one solitary question is not the thorough and comprehensive review of the whole system that was promised by him in 2013? In his statement, the cabinet secretary claims that adding farms would be a significant administrative burden, but since most farms will soon be on any way because of the reintroduction of sporting rates, will he therefore reconsider that opposition? First of all, on agricultural matters, if there is no intention to tax those properties, I do not really see the value in adding them to the role on the matter of wider consideration of alternatives to a property tax. It is not true to say that Barclay did not consider those matters, and they put it in the report of why they have rolled it out and came to the conclusion that a property tax, whilst not perfect, did not find any perfect property tax anywhere in the world, but they came to the conclusion that, with refinement, it can absolutely deliver. Willie Rennie, followed by Daniel Johnson. As the finance secretary has effectively admitted that those proposals will not be revenue neutral, how much of those measures are going to cost? Oh, absolutely. It is a sparkling question to put in. You taught them all that, cabinet secretary. My estimation of the cost of the announcements today is approximately £80 million. Daniel Johnson, followed by Kenneth Gibson. Given that some nurseries in my constituencies were facing a doubling of their bills, can I welcome the cabinet secretary listening to my calls and advice on nurseries? I am very appreciative of it. However, those increases raised the question about how the evaluations were arrived at. I know what the moves on data collection, but what reform will the cabinet secretary take forward to improve the transparency of the calculation on revaluation, so all businesses can understand how their rates bill was arrived at, not just how much it takes? Cabinet secretary, Mr Johnson, it is a nice try for taking credit for my announcements, but I am afraid that my announcements are my announcements. In the spirit of consensus, if the Labour Party has any further ideas that they want me to consider, please do so constructively within the budget process, specifically to the question as to how assessors arrived at the values that they have. Maybe Mr Johnson, like many other members in this chamber, should realise that it was not me who undertook the revaluation. It is the assessors who are independent of government, and Mr Johnson would be well advised to direct his questions to them. The cabinet secretary rightly focused on growth and investment to make Scotland more competitive. Can I advise the chamber that impact anticipates the changes that will have on economic growth on an annualised basis, once fully implemented? That is a very good question. It is difficult to quantify at this stage what it means by way of growth, but I am convinced that the recommendations that I am progressing with today will generate growth, will support our economy and will allow for a fairer, more transparent rate system. In terms of showcasing what Scotland can do, it gives us that competitive advantage on non-domestic rates and sets up in a number of areas that do not exist elsewhere and should deliver on our economic strategy. Thank you. What assessment has been carried out on the affordability of reducing the large business supplement in this year's budget? It may be news to Mr Bowman, but I have not produced this year's budget. I understand from announcements that the UK budget may well be 22 November, so I look forward to constructive dialogue with all the parties as to what may be in this year's budget. I hope that the Conservatives will take a far more constructive approach than they did last year. Richard Lochhead, followed by Elaine Smith. I warmly welcome the cabinet secretary's statement, in particular the on-going 12.5 per cent cap for hospitality businesses and exemption for nurseries in my constituency, which I also call for very loudly. Is the cabinet secretary aware that the rates valuation had a disproportionately negative impact on Murray businesses that was out of sync with local economic factors and therefore that his reference to the sector and assessors having to work together to explore alternative methods of valuation is extremely important if we were to avoid that in the future? Will he attach a timescale of when he expects to hear back from that work? There was a question there. Is the cabinet secretary aware that it was a cute way to do it? I think that it is fair to say that Mr Lochhead has been very proactive and vocal on those matters, including implementation of the reliefs that were announced earlier this year in March, if memory serves me correctly. I agree with all the points that Mr Lochhead has made. Elaine Smith, followed by Fulton MacGregor. Given the Barclay review states that unfair advantage has been gained by private schools due to charitable rates relief and should be removed by 2020—something that I agree with—when exactly is the further report going to come forward on that and what opportunity will it be to scrutinise the Government's decision on that specific issue? By any standard, the Government's response is swift. We received the report some three weeks ago. The First Minister responded on the first day back in Parliament. I am addressing matters now, publishing a statement of intent on our policy position on the recommendations. Further, I have said that there will be an implementation plan, because many of those recommendations will require statutory legislation, some secondary, some guidance, and some direction. Therefore, I propose to come back before or by the implementation plan, which will be concluded by the end of the year with a position on that and all other remaining matters. Can the cabinet secretary expand on what measures he is taking forward on the back of the Barclay review to ensure that more vacant property such as there is in my constituency of Cochbridge and Chryston, particularly in the town centre area, is brought back into use? Barclay had specifically suggested that he is looking at empty property rates relief and further incentives for occupying an empty property. As one example, I will be expanding the fresh start relief that I introduced in 2013, and hopefully that will be a further stimulant in reocupying empty properties. Liz Smith, followed by Clare Haughey. Could I ask the cabinet secretary what assessment the Scottish Government has taken in conjunction with local authorities about the likely economic impact on small independent special schools, which look after some of our most vulnerable children, should they no longer be eligible for charitable relief? I want to get the detail absolutely right on this, so I will write to the member, but it is my understanding from the recommendations and what I am proposing today that there is no change to the status of those schools, but I will absolutely confirm that. Clare Haughey, followed by James Kelly. Can the cabinet secretary outline what measures he is taking in response to the Barclay review to support the development of renewable energy sector? The support that we are expanding includes things that renewables would benefit from, whether it is small business bonus in other areas. However, the expansion of the hydro relief will certainly be very welcomed by the renewables sector. James Kelly, followed by Ben Macpherson. Can the cabinet secretary guarantee that the £80 million of funding measures that he has announced today will not result in a consequential £80 million of cuts in the local government funding settlement? The funding package is all a matter for the budget, but I think that it would be a misdirection to suggest that what is happening today will be funded through a reduction in the local government settlement. That will be all part of the budget negotiations that it will undertake with parties as I present the draft budget in due course. Ben Macpherson, to ask the Scottish Government how they will support SMEs in the hospitality sector, such as those in my constituency in Leith, following the report of the Barclay review of non-domestic rates. Generally, we have lowered the poundage for all rate payers. We have expanded the threshold for small business bonus. We have expanded the threshold for large business supplement, and specifically the cap for hospitality will continue in the fashion that I have described. I am sure that that will be welcomed across the country. To go back to Elaine Smith's question on special schools, I thought that I heard you correctly that you said independent special schools. That is the point of clarity that I want to give you. I do not think that there is any change for those with that specialist nature of service provided. That is different to the overall category of independent schools, and I will make sure that you have that detail. That concludes the minutes to the cabinet secretary. I will suspend for a few minutes to allow front benches to take the place for the next item of business.