The Scottish Government has been accused of “unjustly persecuting” remote, rural businesses for failing to remove non-domestic rates on hydro-electric schemes.
Hugh Raven, managing director at Ardtornish Hydro in Morvern, wrote to the Finance Secretary - who is also his constituency MSP for Skye, Lochaber and Badenoch - to criticise the government for failing to deal with a long-running dispute that he claims threatens further investment and development of hydro schemes in the Highlands.
He said that Kate Forbes’ claim that she is powerless to act, due to state aid rules, is a smokescreen for being unwilling to help a business in her own backyard.
Raven argued that the Scottish Government’s decision to underwrite the business activities of Lochaber aluminium smelter boss Sanjeev Gupta - who owns a 100,000 acre private landed estate - for £161m, “proves that it is willing to brush aside policy when it wishes to intervene”.
Ardtornish has been left in a desperate financial state, after being hit with a £500,000 pound tax bill and was forced to axe a fifth of its workforce last year.
In a letter to the Cabinet Secretary, Raven said: “We find it difficult to accept your insistence that you are powerless to help resolve a long-running injustice which we and several other of your constituents, are facing with non-domestic rates on hydro schemes.
“The Scottish Government has made it abundantly clear that it can intervene when it chooses, so we appeal to you again to do so in this case before further damage to the renewable sector is done.”
His letter noted: “Elsewhere in Lochaber, as you are aware, the Scottish Government chose to intervene in the purchase of the smelter.
“Your department ensured that the largest private estate to change hands in Scotland for decades remained in private ownership - over the heads of plans for a local community buyout - in so doing, your department disregarded Scottish Government policy (to bring more land into community ownership) because ministers thought another outcome was more desirable.
“Your department also disregarded its own rules for deploying public funding, by issuing guarantees to a large private landowner to the value, according to Audit Scotland, of an astonishing £161m.
“In other words, in central Lochaber, your department disregarded Scottish Government policy at colossal expense because ministers thought another outcome was more desirable.”
Raven is seeking an urgent meeting with Forbes to tackle the issue around non-domestic rates for hydro schemes.
Ardtornish operates five small hydro schemes, producing around 3.4 megawatts of energy per year.
It has a turnover of £3m per year, but paid a non-domestic rates bill of £500,000 in 2020 to 2021. The business is ineligible for some reliefs available to other hydro operators in Scotland, because of state aid rules.
Raven added: “You have spoken before about the priority you attach to retaining, and in the case of Lochaber, boosting the population in remote areas - the unjust persecution of remote businesses is having the opposite effect.
“Here is an opportunity within your powers to do precisely what you have said you wish to see.”
A Scottish Government spokesperson said: “We value the contribution that the hydro sector makes to the Scottish economy and to our low carbon ambitions, which is why the Scottish Government has delivered the most generous non-domestic rates relief in the UK for renewables generators, including hydro schemes.
"The Scottish Government is still awaiting clarity on the subsidy framework that the UK Government is currently seeking to establish through the UK Subsidy Control Bill.
“A number of Scottish Ministers have met with Ardtornish representatives on several occasions, and most recently officials have also offered a meeting to discuss Mr Raven’s concerns.”
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