£110m supermarket tax ‘won’t cost jobs’

He insisted that the big six supermarkets likely to be hit by the public health levy will be able to withstand the impact and again ruled out an official assessment into its effect.

Business leaders have warned of a potential £1 billion hit and said it could hold back job creation and “sully” Scotland’s reputation as a place to do business.

But Mr Swinney told MSPs on Holyrood’s economy committee that the retail levy, which was unveiled in the Budget earlier this year, equates to about 0.1 per cent of retail turnover in Scotland.

“As a consequence of that, my view is that the impact of the public health levy that I’ve proposed in the Budget will not have any adverse effect on employment in Scotland,” he said.

“I do not consider – based on advice that I’ve seen on the level of retail activity within Scotland and on the profitability of retailers and the sustainability of the sector – that this would have a damaging effect on employment.

“The public health levy is an affordable and sustainable intervention that will have no negative impact on the Scottish economy.”

The government has come under fire from business leaders for failing to carry out an official assessment into the expected impact of the new tax on businesses.

But Mr Swinney said: “I’ve taken a decision not to undertake a regulatory impact assessment because I consider the effect on 0.1 per cent of retail turnover to be disproportionate in relation to undertaking a regulatory impact assessment.”

The public health levy will hit larger retailers that have a rateable value of over £300,000 and sell both alcohol and tobacco. It is likely that the big six – Asda, Morrisons, Sainsbury’s, Tesco, the Co-op and Waitrose – will be hit. It is designed to generate £110m over three years for spending on health-related issues.

Scottish Retail Consortium director Ian Shearer dismissed Mr Swinney’s claim that the tax was effectively “too minor” for a regulatory impact assessment.

He said: “This policy is unprecedented, using the business rates system to impose an extra tax costing £110m over three years on a handful of major businesses in the guise of a public health measure. It’s hard to see how such a step could be described as inconsequential.”

Mr Shearer went on: “The tax could be a deciding factor when businesses, operating on a global scale, are making growth and investment decisions in the future. Yet the Scottish Government is refusing to assess the consequences for investment, or potential knock-on impacts on employment, contractors and suppliers and consumers. It’s crucial the government is made to pause and properly consider the implications of going ahead with this tax. The precedent it would set is causing alarm across the business community,”

CBI Scotland have also raised concerns over the proposal.

Assistant director David Lonsdale said yesterday: “It could hold back job creation, sully Scotland’s reputation as a place which welcomes commercial investment, and open the door to other sectors being similarly targeted in future.”