Donald Anderson: The 'Tesco tax' will stifle job creation

John Swinney has impressed many with his pro-investment planning changes, and moves to make government more supportive of business, so why is his proposed "Tesco tax" facing such massive opposition? There are good economic reasons why the Scottish Government should think again about a new tax for shoppers.

The recession has hit most areas of the Scottish economy, but retail has been one of the few sectors where investment has continued, driven by the investment of major companies like Sainsbury's. These investments have been the biggest private sector investments in Scotland in the past two years, and more importantly, the biggest creators of new Scottish jobs.

The fact that supermarkets now provide 60 per cent of the UK's calorific intake demonstrates that nearly all of us depend on the weekly shop for our food and other essentials. The importance of job creation is well illustrated in Hawick, where an inexorable rise in unemployment in a community traumatised by the downturn in the textile industry was reversed by the opening of a new Sainsbury's – hopefully giving the town some breathing space for its economy to recover.

The proposed tax will not just hit supermarkets, it will also hit major regeneration schemes. In Edinburgh, great efforts have been made to attract investment into Princes Street. Schemes to transform the shops into the large floorplates modern stores need abound, but they are complex, many are not yet viable and the ones that may work could easily be wrecked by even minor changes in their business case.

Many new developments have a low margin of viability. It is these schemes that will suffer most from any new tax, and real jobs and investment will be lost.

Just as the economy is beginning to recover, this latest tax is increasingly seen for what it will be: a tax on investment, a tax on shoppers and most importantly in the current economic climate, a tax on new jobs.

• Donald Anderson, a former leader of Edinburgh city council, is a director of PPS, a UK consultancy that acts for Sainsbury's.