B&Q throws its weight behind campaign to torpedo Tesco tax

Published on Thursday 13 January 2011 16:52

B&Q last night became the latest retail giant to attack John Swinney's plans for a "supermarket tax", claiming that it could force the DIY chain to reconsider opening new stores in Scotland.

The controversy surrounding the proposal grew when B&Q joined the clamour of retail opposition against the tax that finance secretary John Swinney wants to impose.

B&Q has 29 stores in Scotland, of which 14 will be affected by Mr Swinney's plan to introduce an extra levy for businesses with high value properties. The change would cost B&Q 2 million a year.

B&Q chief executive Euan Sutherland said: "As a Scotsman, I believe that this levy is bad for Scotland. It is a tax on job creation, which could jeopardise the recovery.

"It also makes Scotland less competitive. B&Q is actively looking at opening more stores in Scotland.

"It would be a great shame if we were forced to reconsider whether that investment is viable."

But Mr Swinney rejected calls from retailers to abandon the tax when he met representatives of some of the UK's biggest stores at a meeting in Edinburgh yesterday.

Business rates are expected to be set at 42.6p in the pound for all UK companies next year. But for any Scottish property valued at more than 2.1m, an SNP government would take a supplement of 15p in the pound.

Mr Swinney said the tax, which would generate 30m, was an "essential part" of the revenue required to support public services.

He was speaking after he met representatives of the Scottish Grocery Retailers Forum, an umbrella organisation that included representatives of Marks & Spencer, Asda, Next, Sainsbury, Waitrose, Debenhams, Morrisons and the Scottish Retail Consortium.

Fiona Moriarty, of the SRC, emphasised that the levy would not just affect supermarket giants. She said: "This is not just a supermarket tax. It doesn't support small business and it taxes any retailer, which has a property over a certain value, so it is disingenuous to push the line that this is supporting small business by creating a level playing field. It is a disincentive."

She added: "We had a very robust, strong and clear discussion with the Cabinet Secretary to outline our serious concerns about the proposed levy. We made it very clear indeed that to invest in the Scottish economy and to continue to create jobs we need a good economic environment and relationship with the government."

Yesterday retailers vowed that they would protect consumers against rising prices.

"We have already had VAT increases and the rise in petrol prices affecting household budgets and retailers are doing everything they can to ensure that the price of the weekly shop remains at a manageable level," Ms Moriarty said.

The Scottish Grocers' Federation also joined the growing number of critics, warning that the tax should not apply to stores in town centres.

John Drummond, chief executive of the federation, said: "Our view is that the business rate system should incentivise those retailers, including supermarkets, that choose to locate in towns."The Lib Dems, Conservatives and Labour have all said they oppose Mr Swinney's plans. But they have resulted in fears that the tax could result in price hikes for customers.