Bare-faced cheek and black holes in budget backlash

THE backlash against the SNP’s budget mounted last night when business figures stepped up their attacks on Alex Salmond and raised concerns that his economic plans contained a multi-million-pound gap.

At the end of a stormy week that saw the SNP condemned for its “tax-grab” on business, the First Minister was also accused of “bare-faced cheek” for suggesting that the UK government should copy his economic strategy.

Despite the SNP’s plans to introduce a new “Tesco tax” on shops that sell tobacco and alcohol, sparking fury among retailers, Mr Salmond yesterday said David Cameron should follow the Scottish model.

The First Minister said the UK had to adopt a “proactive approach” to kick-start a recovery based on capital investment and greater access to finance.

“That is why David Cameron should follow the Scottish Government’s ‘Plan MacB’ approach UK-wide, which has been successful in ensuring higher employment and lower unemployment than the rest of the UK,” Mr Salmond said.

But his remarks drew an angry response from his opponents, who objected to the SNP dishing out advice after producing a budget that has been so roundly criticised by business.

Last night, Labour leader Iain Gray said: “Every time Alex Salmond opens his mouth about Plan MacB it is an embarrassment not just for him but the credibility of the Scottish Government. But whether or not he is in denial or totally shameless is not the priority. What is of the utmost importance is the real danger for the Scottish economy of having someone in charge who is not in touch with reality.”

Mr Gray’s comments were echoed by the Scottish Conservative leader, Annabel Goldie, who said: “People are getting fed up of the bare-faced cheek of Alex Salmond. In the week that his own Scottish budget is disintegrating before his eyes, he would be better advised to put his own house in order before he even thinks of criticising anybody else.”

Earlier, Mr Swinney’s budget came in for sustained criticism when a report by a university think-tank claimed that Scottish businesses would be facing a massive increase in their rates bill of close to £850 million over the next three years.

Glasgow University’s Centre for Public Policy for the Regions (CPPR) claimed that the budget showed that income from business rates in Scotland is scheduled to rise by £92m next year, by £264m in 2013-14 and by £493m in 2014-15 – a total of £849m.

Looking at the 2014-15 figures, the Scottish Chambers of Commerce yesterday calculated that the SNP’s plans for a reduction in empty property relief and the new public health levy (or Tesco Tax) would only account for a fraction of the £493m.

According to the Scottish Chambers of Commerce, £18m would be raised in that year from the new empty property arrangements while the public health levy would raise another £40m. To that would be added around £300m, which would arise from rates poundage on the assumption that it would rise by 5 per cent per year – making a total of £358m – some £135m short of the £493m mentioned by the CPPR.

Garry Clark, the head of policy and public affairs at the Scottish Chambers of Commerce, said: “This is a very simplistic calculation and there are a lot of ifs and buts, but there does seem to be this gap between what is projected by the CPPR and what we can account for. There is this shortfall that needs to be addressed.

“I suppose, in an ideal world, if there were to be more businesses created out there then that would be great. But if, in these difficult economic times, there are not, then where is this money going to come from?”

He added: “Businesses do not want to be in the position of being a cash cow for the government.”

Meanwhile, Iain McMillan, the director of CBI Scotland, accused the government of “hypocrisy” for introducing a Tesco tax.

“We were taken completely by surprise by this and we are very concerned about it. First of all, we are very concerned about the impact that it could have on further investment by big supermarkets. I don’t think any threats have been made, but the business community will be alive to the impact of this,” Mr MacMillan said.

“The Scottish Government criticised the UK government very seriously for its tax grab on North Sea oil. It seems to us very hypocritical to do that, then to have tax grabs of their own on the supermarkets.”

Last night, the Scottish Government disputed the Scottish Chambers of Commerce calculations by saying that they disagreed with the original CPPR analysis: “The report provides a misleading analysis of the facts. It is simply wrong to suggest that the Scottish Government is increasing costs for business in the way suggested.”