Oxford High Street

The Scottish Government has voted against a move that would have seen local councils given the power to set business rates.

The move, which was proposed by Green MSP Andy Wightman, was rejected by 103 votes to 10. The Conservatives had backed the change at committee stage but reversed their preference, joining the SNP and Labour.

Mr Wightman had argued: "Non domestic rates is a local tax, it belongs to local government and it belongs to councils.

"Just as the Scottish Parliament sets Scottish tax rates, so too should local authorities set their local tax rates."

Business rates reform has been a hot topic among entrepreneurs and businesses in recent years, particularly as so many stores are being lost from the High Street.

It is a decision that has pleased business leaders, who were concerned about the concept. Many believed that giving power to local councils would have led to high rates and the abolishing of relief schemes.

Tracy Black, CBI Scotland director, said: "Scottish firms will be relieved to see common sense prevail with the uniform business rate being protected, avoiding further complications to the business rates system.

"As the economy continues to stutter, businesses have long called on politicians to support a simplified rates system that encourages greater investment."

Andrew McRae, Scottish policy chairman for the Federation of Small Businesses, said: "MSPs had a big call to make today. If they didn't amend this legislation, we'd have seen bills going up and national reliefs axed.

"This was not the time to hit small businesses with new annual rates bills in excess of £7,000.

"Our MSPs are to be congratulated for recognising this threat and acting decisively to address it."