3 February 2011
The Scottish Government’s budget plans have suffered a serious setback after MSPs rejected proposals for a £30m ‘supermarket tax’.
Finance Secretary John Swinney argued in the Scottish Parliament on February 2 that the levy – dubbed the ‘Tesco tax’ – was justified as Westminster was cutting Holyrood’s budget by £1.3bn.
However, Labour, Tory and Liberal Democrat MSPs voted against the plan, arguing that it would disadvantage large retailers and place Scotland at a competitive disadvantage with the rest of the UK.
The levy planned by the Scottish National Party minority administration would have required large retailers to pay an extra sum on top of their business rates.
The decision to reject it leaves a £30m ‘black hole’ in Holyrood’s budget which surmounted its first parliamentary hurdle on January 26 and is due to come up for final approval on February 9.
Swinney told the MSPs that the government’s priority was to protect family household budgets and help small and medium-sized businesses.
He pointed out that the tax on large retailers, which would bring in an extra £30m a year, would apply to just 0.1% of business properties.
‘Over 90% of the £30m comes from the largest supermarket stores and out-of-town retail parks, with £23m from the largest supermarket chains,’ he said.
LibDem finance spokesman Jeremy Purvis branded the levy an ‘arbitrary tax’ and a tax on jobs and economic growth. He urged that it ‘should go no further in this Parliament.’
Tory MSP Gavin Brown said it was an ‘ill-judged raid on retail at a time when it can least afford it’. He claimed the SNP’s arguments were ‘riddled with holes’.
Labour’s finance spokesman Andy Kerr accused the SNP of taking a gamble with Scottish jobs that the country could not afford.
The tax plan was defeated by 68 votes to 46. Rival parties have already begun political horse-trading in attempt to reach agreement on the £33bn budget before it comes back in front of MSPs next week.
