SNP is warned off new carrier bag tax

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A TAX on plastic bags at supermarket checkouts could deal a devastating blow to Scotland's economy, business leaders warned ministers last night.

David Lonsdale, assistant director of CBI Scotland, said he feared new tax powers for Holyrood in the Scotland Bill will lead the SNP government to pursue a raft of levies such as the bag charge, which is already in place in Ireland and Denmark.

The measure is just months from being introduced in Wales - where customers will be forced to pay 5p for each disposable bag, raising several million pounds a year - and the SNP yesterday refused to rule out imposing a similar levy on Scotland.

Mr Lonsdale said he feared "very tight" public spending pressures could lead the Scottish Government to try to make up a "shortfall" in funding for services by imposing new taxes, and that the bag levy would be on the agenda. "Retail businesses are already doing a lot to improve their environmental performance, and any potential new environmental taxes such as on plastic bags could prove unnecessary and a costly administrative headache for firms," he said.

He said a plastic bag tax - which was thrown out by MSPs during the last parliament when Liberal Democrat Mike Pringle tried to push a 10p levy through Holyrood - "could act as a barrier to investment".

"The current outlook for public spending is very tight and there's a concern that the Scottish Government could look for new taxes to make up the shortfall," he said.

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Mr Lonsdale also said using enhanced Holyrood powers to introduce the bag levy and measures, such as sales and tourism taxes, would make Scotland "a more expensive and less attractive place to invest, live or visit".

Richard Dodd, of the Scottish Retail Consortium, said customers should be able to "voluntarily" decide whether they wanted to pay extra for plastic bags.

He said: "It demonises bags, when there are things that are much more environmentally damaging, such as energy loss from homes and transport.

"Retailers and customers massively reduced the number of bags they used between 2006 and 2010.

"To clobber people with charges would mean we were not taking the public with us on this issue."

Tory finance spokesman Gavin Brown called on Finance Secretary John Swinney to rule out using the Scottish Parliament's enhanced powers to impose new taxes, such as a levy on plastic bags and the SNP's supermarket tax on big businesses, which was thrown out by MSPs in the last parliament.

He said: "There would be widespread anger if these taxes were introduced by the Scottish Government, particularly as ministers have already tried to introduce a supermarket tax.John Swinney should crush any speculation about these taxes now and rule out introducing these measures."

But Green MSP Alison Johnstone said the Scottish Government should follow the example set by countries such as Ireland, Hong Kong and Rwanda in adopting a plastic bag tax.

She said: "It's bizarre indeed for the CBI to come out against one of the simplest and most effective environmental measures around.

"Countries as far apart as Ireland, Hong Kong and Rwanda have already gone down this route, and Wales are next.

"Our current culture of a new plastic bag every time you visit a shop is paid for by retailers.

"The extra litter means we all pay more in clean-up costs, not to mention the impact on wildlife, and the extra landfill charges cost taxpayers dearly, too.

"A small charge has proved remarkably effective elsewhere at shifting people to using long-life bags, and the benefits are substantial."

The SNP refused to rule out the bag tax yesterday and called for greater powers for Holyrood in the Scotland Bill, which is currently going through Parliament, such as control over corporation tax rates and excise duty.

A party spokesman said: "The SNP government wants to see major improvements to the Scotland Bill, to transfer responsibility to Holyrood for things like corporation tax, borrowing, the Crown Estate and excise duty - all powers which will help boost Scotland's economy."