'Tesco tax' plan defeated at Holyrood

Scottish government plans for a large retailer levy to help offset budget cuts have been rejected by MSPs.

Finance Secretary John Swinney said the move, dubbed the "Tesco Tax", would bring in an extra £30m, while his budget was being reduced by £1bn.

But Labour, the Lib Dems and Tories voted the plan down at parliament after branding it "anti-competitive".

The Greens backed the levy, claiming the parties opposing it had taken large donations from big supermarkets.

MSPs backed a Liberal Democrat motion to halt the levy plans from being taken further by 68 votes to 46.

Mr Swinney argued the levy would affect about 0.1% of businesses, while addressing the effect of Treasury spending reductions and protecting hard-pressed families.

But his last-ditch attempt to win enough support for the charge failed win the support of opposition MSPs, who previously rejected the measure at a meeting of Holyrood's local government committee.

Making his case, the finance secretary said: "Over 90% of the £30m comes from the largest supermarket stores and out-of-town retail parks, with £23m from the largest supermarket chains."

Branding the move a "tax on jobs" Lib Dem Jeremy Purvis, said: "The SNP is all over the place on this tax and I'm pleased that it will go no further in this Parliament."

'Substantial donations'

Labour finance spokesman Andy Kerr, added: "The proposal, in my view, shows a complete ignorance of a very important area of Scottish business - one in nine are employed by the retail sector."

Gavin Brown, of the Conservatives, said: "The Scottish government's proposals in this area are nothing more than an ill-judged raid on retail at a time when they least need it."

Meanwhile, Green MSP Patrick Harvie said it was no surprise that the parties opposing the levy had taken "substantial donations" from big retailers.

Citing information from the Electoral Commission, the Greens said that, since 2003, the Labour Party received £10,942,808 from Lord Sainsbury and £99,056.50 from Tesco, while the Liberal Democrats received £35,684.50 from Tesco, and the Conservatives had £30,000 from Selfridges.

Meanwhile, political horse trading between the minority SNP government and rival parties ahead of next week's final vote on the Budget Bill has been continuing.

Mr Swinney insists the £33bn spending plans for the year ahead will promote economic growth - but the opposition MSPs are looking for changes before agreeing to support it.