Thursday, 6 October 2011

Social responsibility/business levy splits retail trade in Scotland

This is just a small observation that those people who will not attract the proposed business levy in Scotland – which is to be levied on 'large' supermarkets selling alcohol and tobacco – seem think it's a good idea. The Scottish Grocers' Federation has supported the levy. Such supporters feel it offers relief to small traders from the competitive pressures of their big brothers in the marketplace – as this piece from January on a proposed 'supermarket tax' seems to suggest.

But the point of the public health levy is to penalise retail shops that sell tobacco and alcohol, rather than to level the playing field between large and small retailers:
"Given the reason for this is to tackle alcohol and tobacco, I think it's short-sighted and naive to suggest that that threshold which has been proposed, in the region of £300,000 of rateable value, that it won't be lowered in due course to smaller retailers."
So says David Lonsdale of the CBI. If he is wrong and the Government is simply trying to level the playing field, then the proposal has been presented dishonestly.

The Scottish Retail Consortium has responded to the announcement of this levy with dismay. In its submission to the Scottish Government to the draft budget it presents some sound arguments criticising the levy, including the arbitrary nature of its imposition on a small part of the retail sector, poor consultation, no sign of the levy in the SNP's election manifesto, lack of consultation and the size of the financial burden. The submission makes good points about lack of accountability, transparency and communication.

I hold no candle for the likes of Tesco and Asda, and in general wouldn't shop with them. But to say I'm uneasy about the levy is putting it mildly – not only about the general approach to raising the revenue but the vagueness about how the money will be spent. As the SRC points out, major supermarkets have been contributing to public health efforts:
Supermarkets take the responsible retailing of alcohol, tobacco and  all other lines extremely seriously.  They have led industry in working in close partnership with Government towards achieving this aim and in supporting associated health objectives.  They contribute substantial sums towards the funding of DrinkAware, pioneered the prevention of under-age sales through the Challenge 25 initiative and have led the way on clear alcohol labelling.  Over many years they have led industry in their nutritional initiatives and their commitment to help consumers to make healthier and balanced choices in the food they buy.  As recently as July, the SRC and major retailers announced, to wide acclaim, a major new commitment to support greater consumption of fruit and vegetables ...  
As they say, an appeaser is someone who feeds a crocodile hoping it will eat him last. Not sure quite why those words came to mind!

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