SNP to scrap supermarket tax next year

The £95 million public health levy on big shops selling alcohol and tobacco was introduced in 2012, but finance secretary John Swinney has confirmed it will not be continued when it comes to an end next year.

The SNP said the levy had been used to tackle health concerns and it only affected about 240 stores. The tax had prompted fears it could lead to higher prices for food and other goods as shops looked to cover costs.

But Mr Swinney confirmed during a reception with retail chiefs this week that he would not be extending or replacing the levy.

Scottish Retail Consortium director David Lonsdale said the measure had been a “blot” on government claims to have the “most competitive business rates regime in the UK” as those paying the levy were charged 28 per cent more than their equivalent stores south of the Border.

Retail chiefs were furious when the tax was first proposed in 2011 and have campaigned against it since then. Mr Lonsdale said that the climbdown sent a “positive signal” that the government supported a “favourable business environment”.

A Scottish Government spokeswoman said last night that the finance secretary made clear when the supplement was introduced that it would last for one three-year spending review period only, and that 2014-15 would be the final year.

“That has always been the position and is clearly set out in legislation,” she said, adding that the government was committed to matching UK rates.

The SNP government first tried to introduce the supermarket tax in early 2011 during the last parliament, but the then-minority administration was voted down by opposition parties.

Only the Greens backed it at the time and leader Patrick Harvie said it was no surprise that the parties opposing the levy had taken “substantial donations” from big retailers.

Citing information from the Electoral Commission, the Greens told MSPs at the time that, since 2003, the Labour Party had received £10,942,808 from Lord Sainsbury and £99,056.50 from Tesco, while the Liberal Democrats received £35,684.50 from Tesco, and the Conservatives took £30,000 from Selfridges.

But after the SNP won a majority at Holyrood in 2011, it was one of the first measures revived and was pushed through with the support of the Labour Party.

Scottish Tory finance spokesman Gavin Brown said the levy was “a bad idea in the first place”. He added: “We fought strongly against it. The retail levy wasn’t in the SNP’s manifesto, and it didn’t bother carrying out a business impact assessment.

“While we welcome the fact it is to be brought to an end, we want it to be scrapped now, so businesses don’t have to be punished right up until March 2015.”