Retailers clash over 'Tesco tax'

Supermarket giants should not be held responsible for filling the Scottish government's budget shortfall, retail representatives have argued.

The Scottish Retail Consortium attacked plans to impose additional business rates on large retailers, dubbed the "Tesco tax".

But the Federation of Small Businesses backed the move, saying smaller retailers were in decline.

The tax plan is likely to be rejected in a vote at Holyrood next week.

The SNP government said its budget was being cut by more than £1bn as a result of UK spending reductions, and insisted the new tax would only affect about 0.1% of businesses.

But Fiona Moriarty, director of the Scottish Retail Consortium, which represents the big four supermarkets, said small businesses needed bigger ones to survive.

"It's not our job as a sector to come up with solutions for budgetary shortfalls," she told the Scottish Parliament's local government committee.

But Federation of Small Businesses public affairs chief Colin Borland said the levy was backed by 74% of his members.

He added: "There is a question over whether investment in out-of-town shopping centres is actually good for local small businesses.

"If you level the playing field as much as possible it will be easier for small businesses to do what they're best at - trading us out of this mess."

The Scottish Licensed Trade Association, which represents pubs and off-sales, also said it supported the plans.

Spokesman Paul Waterson said: "The Scottish government has identified a fair and reasonable way to raise money in this very difficult economic climate.

"Our members support this initiative which will go some way to addressing a major imbalance in the way supermarket rates are calculated."

Scottish ministers argue it is reasonable to ask a small number of the biggest retailers to pay extra, rather than imposing alternatives like raising council tax or cutting business relief.