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?


Business bumps its gums again

For a moment I thought it was April Fool’s Day.  Reading the papers online before the first cup of coffee of the day is sometimes not the wisest move.

Top story in today’s Scotsman is all too wearily familiar, with business organisations bumping their gums about a plastic bag tax.  The froth from their fulminating is laughable, particularly when there are not (yet) clearcut proposals to introduce such a tax.  If the Scottish Government gets its way, and if it gets all the tax raising powers it is demanding from Westminster for a super-charged Scotland bill, one of these will include the power to impose a plastic bag levy, something which the Scottish Government may introduce.  It is a classic case of attack being used as a form of defence.

Apparently, such a tax “could deal a devastating blow to Scotland’s economy”; CBI Scotland reckons such a tax “could act as a barrier to investment” and that this, and other measures such as sales or tourism taxes could make Scotland “a less attractive place to invest, live or visit”.

But winner for most over-hyped hyperbole is the Scottish Retail Consortium:  “It (a tax) demonises bags, when there are things that are much more environmentally damaging such as energy loss from homes and transport.”  What, not from badly designed, built and insulated supermarkets and stores?  “To clobber people with charges would mean we were not taking the public with us on this issue” – a response to the fact that many customers have voluntarily eschewed plastic for eh, more heavy-duty plastic with the supposed bags for life and various expensive hessian options.  A nice little earner for the supermarkets, by the by.

Clearly a slow news day then….

At the heart of it all, is CBI Scotland’s oft-repeated mantra that it is wrong for any shortfall in public spending to be made up by an increased contribution from the private sector.  The Scottish Government could increase income instead of just applying cuts to lessen the impact of a tight financial settlement.

Well, doh.  Isn’t that what any responsible accountant or financial guru would recommend?  Isn’t this what businesses do day in day out?  Raising prices, finding new ways to extract dosh from customers is all part and parcel of good business sense.

But of course, business doesn’t see itself as having any corporate social responsibility to the commonweal.  There is no sense of “we’re all in this together”.  They – or rather their representative organisations – expect to carry on untrammelled by what is going on around them, unencumbered by any sense of duty to contribute more to the kitty.  I’d have more sympathy if both the CBI and SRC were targeting their concerns at the impact on small shop owners and independents.  They, however, are likely to see such a tax – as their counterparts in countries like Ireland and Denmark which already have such a bag levy – as a potential wee moneyspinner.  People going into a gift shop to buy one or two small things will either forego a bag altogether – as they do now – or value the purchase enough to add another 5p or so on to it.  No one will object to a small shop ensuring it recoups all the costs of levying the tax in the cost of the plastic bag and if that means also making a small profit on the transaction, then good frankly.

We will, of course, be less impressed if the supermarkets or big retailers which already make huge profits by squeezing every penny possible from their transactions with the public try the same tack.  They will find it more difficult to pass on the whole cost of the tax to customers because people will object, thus requiring them to absorb the administrative costs themselves, eating into their profit margins.  The burdz heart bleeds.

When it comes to a choice between a plastic bag levy to raise more income to protect services like classroom assistants, home helps, libraries, community centres, health visitors, hospital cleaners and much more, then this is a no-brainer.  Same with the likes of a tourism tax.

Local authorities’ prime responsibility is to provide services to the people who live in their areas and they must use all measures at their disposal to do so.  If that means tourists contributing indirectly so that museums stay open and free where possible, so that local monuments and parks are maintained, so that walks and visitor centres are passable and staffed, so that public toilets are clean and available, then so be it.  A clever council would hypothecate at least some of the tourism tax income to such endeavours ensuring there is a direct correlation between what tourists pay and how they benefit.

Business frothing at the mouth every time any ideas are mooted to help offset the worst of the ConDem cuts to our budget is futile and pointless.  Their representative bodies would be far better deployed engaging constructively and proffering proposals on what they can do to help.  In case, they had not noticed, Scotland has moved on from the tired ways of the past and is looking and travelling forward.  Scare tactics no longer work: positivity triumphed remember?

Scotland seems committed to learning a new sang: it’s time business realised that and composed a fresh and compelling refrain.