Vote! Tesco tax – good or bad?

Labour’s putatitve finance spokesperson Richard Baker accused the Cabinet Secretary for nearly everything, John Swinney, of failing to produce any rabbits out of the hat with the Scottish Government Spending Review.  But he was wrong.  Welcome back, Tesco Tax.

It was not trailed, nor pre-announced in any media report, nor mentioned in the manifesto, yet it is the comeback kid, now disguised as a public health levy.  And it is not strictly speaking a tax but a plan to increase the business rates of retailers occupying premises over a certain value and if they sell alcohol and tobacco.  This was what the Cabinet Secretary had to say about it in his speech to Parliament:

“In order to support the shift to preventative spending, I have looked to increase revenue for this purpose. Scotland’s health and social problems associated with alcohol and tobacco use are well documented and are something we are firmly committed to addressing. These problems affect not only the health of population, but create additional burdens on policing, local authorities and the NHS. As such, I propose that the business rates paid by large retailers of both tobacco and alcohol will be increased by a supplement from 1st April 2012.The estimated income this will raise will be used to contribute towards the preventative spend measures that will be taken forward jointly with the Scottish Government, Local Authorities, the NHS and the Third Sector.”

So a tax with a purpose: money to be raised from those big retailers who profit from sales of tobacco and alcohol will be put to tackling Scotland’s health and social problems associated with excessive use.  There are dangers inherent on starting down the road of hypothecation, as Bill Howat (he who chaired one of the earliest public sector reform reviews) warned on Newsnight Scotland on Thursday, but the Cabinet Secretary needed to raise income from somewhere to kickstart the shift to preventative spending.  It will only realise £40m a year, not enough to achieve whole population shift in our attitudes to alcohol and tobacco, nor to lessen the impact on families of alcohol misuse in particular, but it is a start.  And sends a clear signal about the direction of travel of this Scottish Government.

Of course, the retailers to be affected, and their cheerleaders in the British/Scottish Retail Consortium, CBI Scotland and it would appear, all of the Scottish media, would have you believe that their sky is about to fall in.  Ignoring totally that because they bulk buy in such huge volumes, they can charge less than corner shops for booze and fags and still make more profit.  Ignoring too that minimum pricing will raise their prices, and their margins, and that the public health levy will help ensure less of that goes into senior executives pockets and shareholders’ bank accounts.

Last time round, Labour blundered – in the burdz humble opinion – in siding with the interests of big business, particularly because it was close to an election.  It signalled just how far they were willing to go to oppose the SNP and left a sour imprint in the minds of many voters, that the party set up to defend, protect and promote the interests of the working class had shifted to the side of the producers of profit and gain, and frankly those who peddle so much pain in people’s lives.

It didn’t warrant a mention in Richard Baker’s speech on Thursday and the party has had little to say on it since, despite the cost of the levy and other business measures dominating the headlines – read Stephen Noon for a vigorous trampling of CPPR’s supposed analysis that so entranced journalists.

But the Scottish Retail Consortium’s comments are interesting – it “condemned” the proposal with its Director, Ian Shearer, fulminating that the measure is “illogical and discriminatory”.  Sorry, sir, but I’ll confine my concern about discrimination to stuff that really matters, like the gulf in pay between men and women, no doubt practised by many of your members.

Apparently, “Supermarket margins are already cut to the bone as stores compete to offer the best deals to cash-strapped consumers.”  Yes, that is the sound of laughter you hear accompanying this post.

“The UK already has some of the highest alcohol taxes in Europe. This tax would make it harder for food retailers to keep prices down for customers, and makes Scotland a less attractive place to do business, invest and create jobs.” 

Ah, now we get to it…. the threat.  If the Scottish Government goes ahead with this proposal, the supermarkets will retaliate, not with increased prices for alcohol and tobacco, but they will pass on the cost of the levy through food and other staples, which as we know will disproportionately impact on those with the lowest incomes.

Have these people no shame?  My advice to the Scottish Government is let them.  To coin a phrase, bring it on.  We have’t had some good old-fashioned class warfare in Scotland since Thatcher’s times and I reckon the populace are up for a battle.  So, we’d have the SNP Government, the consumer, farmers and other producers, farmers’ markets, the Green lobby, and the independent specialist food retailer all standing up to the bullying retail tactics of the supermarkets.  I’m salivating at the prospect already…..

Want my advice, Cabinet Secretary?  See them and then raise them.  I was rather taken with the idea behind Dr Richard Simpson’s motion this week to introduce powers to allow a tax on sugary foods…..

So, I think I’ve made myself pretty clear – I like the Tesco tax.  It will bring in additional income from those who can most afford to pay to enable a public sector revolution to begin, where we start investing in preventing issues like tobacco addiction and alcohol misuse happening in the first place.

But what do you think of the public health levy?

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About burdzeyeview

A Scottish burd casting a beady eye over political, topical, economic and social issues that ruffle my feathers.

Posted on September 24, 2011, in Political witterings and tagged , , , , , , . Bookmark the permalink. 15 Comments.

  1. Unum Quid Fritter

    PS Forgot to add – hypothecated taxes are administratively tricky.

  2. Unum Quid Fritter

    A more intriguing question is empty Rates relief. Currently it’s 100% on vacant industrial and anything that is “incapable of beneficial let” with lesser relief on offices and retail.

    England restricted this relief a couple of years ago to wails of “it’ll reduce new development and encourage landlords to remove the roofs from buildings”. I trust someone’s gone to the bother of finding out any lessons learnt.

    There’s a balance between creating an incentive to let and taxing something that’s non-income producing – throw in the law of unintended consequences (and ambiguously written Regulations) and it’s got a lot of potential for jumping up and biting him.

    I wonder how long it’ll be before free-standing booze ‘n’ fags shops (a separate entry in the Valuation Roll with a Rateable Value below the tax threshold) start popping up in supermarket car parks! I’ll bet you it’s already crossed their minds.

  3. Wholeheartedly agree with eveything you have said! The supermarkets are rolling in cash at the expense of small business, if anyone should pay more tax it is them.

  4. If Tesco the Tax Evaders don’t like it, then it must be good. Two thumbs up from me. I only wish there was a way to stop the influx of Tesco Metros etc making even more blatant attempts to eradicate smaller retailers – Holburn Street in Aberdeen recently had a new one open up literally two doors up from the Co-op which has been there since the dawn of time, and the excellent Royal China restaurant ever so slightly further up the road has closed and is apparently being turned into a wee Sainsburys – even though there’s already one just a five minute walk up the road on the corner of Holburn Street and Union Street! We need to put a stop to it before there are no smaller retailers left.

    Now to go and eat some sausages, bought from Marshall’s market in Aberdeenshire. Far better than the tasteless rubbish Tesco peddle. Maybe there should be a tax based on % of quality meat in sausages?

    • Good grief, was there ever such an outpouring of harmony twixt blogger and commenters?!

      I also know that before April this year when the new provisions from the recent Licensing Act kicked in – 2009 I think it was passed – the supermarkets were doing the rounds of the Licensing Boards seeking to increase the floorspace given over to alcohol and any board that turned down their application was taken to court, costing taxpayers money to defend boards’ decisions. They were doing it before the provisions limiting space to alcohol promotion came into effect because a license for more space usually would last for 3 years, allowing them to get round the new limits.

      Nice huh?

  5. Scottish republic

    The supermarkets selling firewaer at ridiculously low prices are the equivalent of pushers.

    They make a profit and local shops die – let them pay a wee bit back for the harm they’ve done and do;

  6. One just needs to see who make up CPPR who I believe are retracting their numbers from the biased press release.

  7. In the words of Supertramp

    “Your right, your bloody well right”

  8. Absolutely right. I was enraged by the threat of major retailers taking their ball away because they’re being asked to take responsibility for providing cheap booze and fags to a sick nation. Local businesses have suffered hugely from the Tescofication of Scotland, and if they raise their prices, maybe the corner shop and the butcher might start providing competition again.
    Also as a career barman I’m sick and tired of the bar trade being blamed for social ills (and priced up accordingly) when most of the damaging drinking is a result of off-sales, specifically supermarkets and their slabs of beer (and “Value” spirits).
    Like you said, bring it on.

    • I agree, particularly about the role of pubs. Our drinking habits have changed out of all recognition and we are drowning ourselves in booze – I can be as guilty as the next person of this! And the key reason is how normal it is to stock up on lots of booze from the supermarket and to consume large quantities at home. Pubs aren’t the problem, in fact a responsible licensed trade – which could do more particularly in relation to young drinkers – is part of the solution. I don’t blame the bar trade at all for how we got to where we are.

  9. Agree on all counts. I accept the details might have changed since I wrote this but the arguments haven’t http://stucbetterway.blogspot.com/2011/01/is-proposed-supermarket-tax-really-job.html
    A related problem here is the lack of capacity in the Scottish media to engage properly with economic issues; leaves them susceptible to any old nonsense the business lobby presents.

    • They have all just lifted everything that business said in press releases, and also what the CPPR have to say without questioning any of it. I can’t find the CPPR stuff online anywhere, only media reports of it which instantly makes me suspicious. I don’t buy into the tired SNP tirade of CPPR being Labour puppets, think they actually produce some good stuff, but they should be open and transparent with their analysis cf Institute of Fiscal Studies and allow us all to pick over the bones of what they produce.

      • You can find CPPR publications here: http://www.cppr.ac.uk/centres/cppr/ …although the sections on people and governance appear to have been removed. I was for a time on the Advisory Board but since then funding has been lost leaving researchers with little choice but to move onto other posts; this is a real shame as the centre produced a wide range of valuable research in its early years. Research interests have narrowed considerably and it appears the CPPR now comprises only Profs McLaren, Armstrong and Harris. For what it’s worth, I think their analysis is often useful (I’ve shared similar concerns to those expressed in this recent report for some time: http://www.cppr.ac.uk/media/media_211249_en.pdf ) but don’t share their prescriptions in key areas of policy e.g. Scottish Water.

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