Long-term hope for memory lapse as the honeymoon comes to an end

HAVING renewed its wedding vows with the electorate in such spectacular terms in May, the new SNP administration must have always suspected that its first budget would mark the end of the honeymoon.

Given the economic challenges that the world – not to mention Scotland – faces, this week was always going to be tricky – even for politicians as astute as John Swinney and Alex Salmond.

But the imposition of a “Tesco tax” – albeit in an altered form from supermarket levy that got shouted down in the last parliament – was a gamble.

While the SNP can argue that alcohol and cigarettes are undoubtedly bad for Scotland’s health, getting on the wrong side of business so early on hardly seems a wise thing to do.

The fury of the supermarkets is palpable. Just as there was no mention of delaying an independence referendum until the second half of the parliamentary term in the SNP’s manifesto, there was nothing about a supermarket tax.

Unsurprisingly, this has caused fury. As has the fact that the government has yet to consult with retailers on the viability of the plans.

Almost every business person one speaks to talks of their “shock” that this proposal has come to pass. Then comes a bombardment of questions on how exactly the levy is going to work.

One assumes that Mr Swinney and Mr Salmond have the answers at their fingertips. If not, there could be trouble ahead.

Another bombshell hit the government with the publication of the Scottish Spending Review analysis carried out by the University of Glasgow’s Centre for Public Policy for the Regions.

The government disputes their view, but the fact that a respected think-tank has suggested that hidden within the SNP’s plans is an enormous increase in business rates over the next three years has inflamed the business community further.

Again, the threat of businesses having to pay an extra £850 million in tax has not gone down well.

Messrs Salmond and Swinney must hope that an economic recovery ensures this sort of poor publicity is long forgotten when the independence referendum finally rolls round.