MSPs have rejected controversial government plans to raise £30m from a so-called “Tesco Tax.”
The levy on large retailers was aimed at out-of-town superstores, but it could have added £250,000 a year to rates bills for major city centre retailers like John Lewis.
On Wednesday Lib Dems, Labour and the Conservatives combined to reject the proposal by 68 votes to 46, following a debate at Holyrood.
Finance secretary John Swinney had challenged the opposition parties to back the move or say where they would make cuts to save the necessary £30m.
His budget for 2011-2012 includes a provision to raise that amount from the most expensive business properties, 86% of which are occupied by the big four supermarkets.
But Lib Dem finance spokesman Jeremy Purvis, who brought the motion, said he was “pleased” the proposal would go no further.
“This is an arbitrary tax, a tax on growth and it sets businesses back,” he said.
Tory enterprise spokesman Gavin Brown said it was “absolutely right” for the parliament to reject the tax.
“We cannot afford to put jobs at risk during these tough economic times by creating a tax burden that makes Scotland less competitive than the rest of the UK,” he said.
“For the SNP to complain about a £30m hole in the budget is misguided because we know they are sitting on £89m more from business rates than they expected, as we saw in the recent budget documents.”
The tax was a “gamble with Scottish jobs the country could not afford,” said Labour’s Andy Kerr, adding, “Retailers warned us that it would make Scotland less competitive and could cost up to 8000 jobs.”Greens’ backingThe measure was supported by the Greens, who said other opposition parties were siding with big business. The Scottish Retail Consortium had opposed the plan but it has been widely welcomed by the Federation of Small Businesses.
Iain McMillan, director of CBI Scotland, said he was “pleased and relieved” the tax had been rejected.
After the vote, Mr Swinney said the tax would have helped share the burden of budget cuts imposed by the UK Government.
“It is very disappointing that parliament did not support the view that those with the broadest shoulders should bear more of the burden at a time when Westminster has slashed Scotland’s budget by £1.3bn,” he said.
“This proposal would have impacted on a tiny number of retail properties in Scotland and has received broad support.”
He would now consider how the decision impacts on next year’s budget, ahead of its final reading next week.
“As a minority government, we need to build consensus for our spending plans,” he said.
“Parliament’s decision today does nothing to support employment, and makes the decisions we will need to consider as part of our spending plans all the more difficult.”
In Tayside, the tax would have cost supermarkets nearly £2.5m a year, with the largest supermarket in the area the Kingsway West Tesco Extra in Dundee paying an extra £376,500 a year.
In Fife, the levy would cost supermarkets more than £1.5m.