Scottish budget: major retailers hit with new cigarette and alcohol tax
Major retailers selling cigarettes and alcohol are to be hit with a ''discriminatory'' new tax under the Scottish Government's budget plans.
- By David Clegg, political editor
- Published in the Courier : 22.09.11
- Published online : 22.09.11 @ 07.34am
Finance Secretary John Swinney's surprise ''public health levy'' came as he unveiled his three-year spending plans at Holyrood on Wednesday.
The proposal — condemned by large business organisations — follows the failed ''Tesco Tax'' the SNP attempted to include in this year's budget.
Mr Swinney said the new tax was ''fair and proportionate'' and a vital revenue-raising measure given a backdrop of a real-terms reduction in the budget of £1.6 billion between this year and 2014-15.
He estimates £110 million will be generated in the next three years by imposing the levy through a business rates supplement on premises with a rateable value above £300,000 that sell tobacco and alcohol.
He confirmed a further one-year freeze on public sector pay — including the wages of ministers.
And he admitted that pension employee contributions will have to be raised for teachers, NHS, police and fire schemes despite his party's objection to the UK Government measure.
Mr Swinney told MSPs his review fell at a ''defining moment'' against the backdrop of ''savage reductions'' from Westminster.
But he said the new parliamentary majority allowed a ''decisive shift'' to preventative spending measures, which will see the state intervening earlier in social issues.
Explicitly linking the move to the new business tax, he added: ''Scotland's health and social problems associated with alcohol and tobacco use are well documented and are something we are firmly committed to addressing.
''These problems affect not only the health of the population, but create additional burdens on policing, local authorities and the NHS.''
But Ian Shearer, director of the Scottish Retail Consortium, attacked the tax, saying: ''This ... is a blatant fundraising exercise which is illogical and discriminatory.''
However, it was welcomed by Andy Willox, of the Federation of Small Businesses, who said: ''Moves to make large out-of-town retailers pay a more proportionate level of rates will be welcomed by many of our members on the high street.''
Mr Swinney said ''tough choices'' were needed to balance the books, calling for further savings in public services.
Confirming the public sector pay freeze for the coming year, he hoped it would be the last before ''modest increases.''
Any employee earning less than £21,000 will continue to receive at least a £250 rise in their salary.
Mr Swinney also confirmed the measure of switching more than £750 million from the Scottish resource budget to the capital budget in an attempt to stimulate economic growth.
Labour's finance spokesman Richard Baker said: ''If councils are to meet the costs of the SNP's pledges, it will mean more council workers losing their jobs, further cuts in service and the evidence of the last parliament is that education and social work budgets will be particularly badly hit.''
Conservative finance spokesman Gavin Brown said the SNP was failing to ''match rhetoric with reality,'' while Lib Dem leader Willie Rennie defended the spending decisions taken by the UK Government.
- For full coverage of the budget announcement, and local reaction, see Thursday's Courier.
08.01am - 22.09.2011 Gordon Anderson - Aberdeen, UK Report This
Looks like your online library photograph is about 5 years old ... prices are a bit different now for cigarettes :-) Just an observation - I enjoy the online courier
08.17am - 22.09.2011 T. Butchers - dundee, uk Report This
Let's be honest here, it's not a 'health tax' it's a tax. Just like the wage freeze is a tax. How else are all these people going to roam around on free public transport or sit with their hands out waiting for benefits if no one else pays?
08.58am - 22.09.2011 gnasher - dundee, angus Report This
Labour, the party of council workers! Welcome to the world of private enterprise where jobs aren't protected!
04.25pm - 22.09.2011 Kev - Dundee, Scotland UK Report This
"public health levy" = new tax. Why couldn't Swinney just be honest and upfront instead of using weasel words that only come across as trying to make us all look like fools?
05.50pm - 22.09.2011 Alan - Dundee, Scotland UK Report This
@gnasher I'm willing to bet you would be first in line to complain if a cull in public sector jobs meant worse performances by Councils and the NHS.
10.01am - 23.09.2011 Not in my name. - Dundee, Scotland, United Kingdom. Report This
Levy (tax) on supermarkets selling tobacco and alcohol, 22% rise in business rates over 3 years, no public sector redundancies, debts stretching 100 years through P.F.I. built schools and hospitals. Welcome to the would be independent Socialist Republic of Scotland as envisioned by Commisar Salmond
04.49pm - 23.09.2011 Alexander - Montrose, Angus Report This
Minimum pricing of alcohol will give the supermarkets more revenue, the supermarkets will have to give some of their extra cash to the Scottish Government, the SG will then use the levy to protect the NHS in Scotland, a win, win, win situation all round, good government from the SNP at Holyrood.
10.09am - 25.09.2011 T. Butchers - Dundee, uk Report This
Badly thought through nonsense from a poor quality government. @Alexander...I don't think the point is that people should drink more, spend more and get ill more. If that's 'win-win' God help us!
02.02pm - 26.09.2011 Ando - Dundee, Scotland Report This
@ T. Butcher Couldn't agree more. Besides, if you tax more, you will pull in less revenue and see business create fewer jobs.
06.41pm - 26.09.2011 Alexander - Montrose, Angus Report This
T.B, minimum pricing of alcohol will reduce drinking levels, WIN. the tesco tax will give the SG a bit more cash, WIN. The cash will go towards the upkeep of the NHS, WIN, its good innovative government from the SNP.
Add a comment