Trump caught up in business rates rebate row

Stuart Hicks, Manchester Office, Director - Dunlop Heywood

I’m not sure there’s much that makes Donald Trump have many sleepless nights but a headline has popped up that could be giving Scottish politicians one or two.

It has come to light, that Scottish taxpayers have given Donald Trump a tasty £110,000 business rate rebate to help his £11m golf business in Ayrshire (approximately the same amount as an annual membership fee for his Mar-a-Lago club in Florida I hear).

The embarrassing hand out came about from emergency funding for struggling tourism businesses introduced by the Scottish Government which has now benefited Trump Turnberry, the profitable, prestige hotel and golf resort on the South West coast.

The public subsidy for such a “toxic” brand was an “embarrassment” that could damage Scotland’s reputation, opposition politicians have warned.  As a result, they are demanding urgent reforms to business rates to prevent it from happening again.

In February 2017, the Scottish Finance Secretary, Derek Mackay, announced a “transitional” business rates relief scheme to reduce the property taxes paid by hotels, restaurants and others in the hospitality industry.

Now a bit of old fashioned investigative reporting has discovered that the scheme subsidised Trump. According to South Ayrshire Council, it directly resulted in rates’ relief for Trump Turnberry of £109,530 for 2017-18.

The relief was “mandatory” under Scottish Government rules, the council said in response to a FOI request. It amounts to a 13.5 per cent reduction in Trump Turnberry’s estimated annual rates bill of £811,800 (you can just imagine the press officer’s shoulders sagging when that media request landed on their desk).

Perhaps this is also a bit of fake news but earlier this year, Trump said that the business was doing “unbelievably” because of the fall in the value of the pound after the Brexit vote to rub more salt in this wound.

Trump bought and renamed the resort, which has hosted the British Open golf championship four times, for £34m in 2014. He is still the owner, but the business is now run by his son, Eric.

Opposition politicians may condemn the pay-out but rules are rules and as much as I hate to say Trump’s business is entitled to it as much as the small independent B&B down the road.

It probably comes at a particularly bad time for the Scottish Parliament that is raising business rates for private schools which are now having to increase fees as a result with scholarships and bursaries for less well-off children also threatened.

The Scottish Government hasn’t commented on the story but pledged to “swiftly” respond to the recommendations made by the Barclay review of business rates. Strange, having read the review I can’t remember seeing any Trump rebate exemption clauses in there.