Major retailers selling cigarettes and alcohol are to be hit with a ”discriminatory” new tax under the Scottish Government’s budget plans.
Finance Secretary John Swinney’s surprise ”public health levy” came as he unveiled his three-year spending plans at Holyrood on Wednesday.
The proposal condemned by large business organisations follows the failed ”Tesco Tax” the SNP attempted to include in this year’s budget.
Mr Swinney said the new tax was ”fair and proportionate” and a vital revenue-raising measure given a backdrop of a real-terms reduction in the budget of £1.6 billion between this year and 2014-15.
He estimates £110 million will be generated in the next three years by imposing the levy through a business rates supplement on premises with a rateable value above £300,000 that sell tobacco and alcohol.
He confirmed a further one-year freeze on public sector pay including the wages of ministers.
And he admitted that pension employee contributions will have to be raised for teachers, NHS, police and fire schemes despite his party’s objection to the UK Government measure.
Mr Swinney told MSPs his review fell at a ”defining moment” against the backdrop of ”savage reductions” from Westminster.
But he said the new parliamentary majority allowed a ”decisive shift” to preventative spending measures, which will see the state intervening earlier in social issues.
Explicitly linking the move to the new business tax, he added: ”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 the population, but create additional burdens on policing, local authorities and the NHS.”
But Ian Shearer, director of the Scottish Retail Consortium, attacked the tax, saying: ”This … is a blatant fundraising exercise which is illogical and discriminatory.”
However, it was welcomed by Andy Willox, of the Federation of Small Businesses, who said: ”Moves to make large out-of-town retailers pay a more proportionate level of rates will be welcomed by many of our members on the high street.”
Mr Swinney said ”tough choices” were needed to balance the books, calling for further savings in public services.
Confirming the public sector pay freeze for the coming year, he hoped it would be the last before ”modest increases.”
Any employee earning less than £21,000 will continue to receive at least a £250 rise in their salary.
Mr Swinney also confirmed the measure of switching more than £750 million from the Scottish resource budget to the capital budget in an attempt to stimulate economic growth.
Labour’s finance spokesman Richard Baker said: ”If councils are to meet the costs of the SNP’s pledges, it will mean more council workers losing their jobs, further cuts in service and the evidence of the last parliament is that education and social work budgets will be particularly badly hit.”
Conservative finance spokesman Gavin Brown said the SNP was failing to ”match rhetoric with reality,” while Lib Dem leader Willie Rennie defended the spending decisions taken by the UK Government.For full coverage of the budget announcement, and local reaction, see Thursday’s Courier.