SUPERMARKET MAKES COST OF RETAIL LEVY IN JUST OVER AN HOUR

EMBARGOED: 00.01hrs, Wednesday 19th January 2011


Attn: NEWS DESKS

BUSINESS / POLITICAL CORRESPONDENTS


YET OPPOSITION PREFER £30 MILLION CUT IN PUBLIC SPENDING


Figures released by SNP MSPS Bob Doris and John Wilson ahead of the Scottish Parliament’s Local Government Committee discussion of the proposed large retail supplement levy highlight how one supermarkets raises the cost of the levy within an hour. Across the UK Sainsbury take £2.5 million in an hour – equal to their share of one year of the levy.

Figures showing the sales of the big four supermarkets reveal that it would take Sainsbury’s only 1 hour 6 minutes to make the money from its trade to pay the levy, 1 hour 46 minutes for Tesco, 2 hours 20 minutes for Morrisons and 3 hours 43 minutes for Asda.


An analysis of the profits of the ‘Big 4’ supermarkets show that the rates increase is a mere half of one per cent of their multi-billion profits. The combined profits of the ‘Big 4 ‘ for the 2009/10 was over £4.5 billion, whereas the rates increase for supermarkets will be only £23 million – 0.5% of their annual profits.


Commenting on the figures Bob Doris – the committee’s Deputy Convener – said:


“The SNP’s budget for Scotland backs public services and Scotland’s businesses yet it is astonishing that Labour in coalition with the Tories and LibDems want to cut £30 million from the Scottish budget in the interests of supermarkets.


“Supermarkets make the money to pay the large retail supplement levy in hours. It is simply astonishing that those parties are now the supermarkets friend and will support putting a £30 million hole in Scotland’s budget and that supermarkets who play a key role in communities and benefit significantly from them are not willing to pay what to them is an incredibly small amount to support businesses and services in those communities.


"It is equally astonishing that any party – never mind a Labour, Tory and Lib Dem coalition - supports such a cut which can only result in them supporting an increase in council tax to pay for their support for supermarkets.


Fellow committee member John Wilson said:


“Why on earth are the opposition putting themselves in a position where they prefer a pensioner paying more in council tax to a supermarket paying a little bit extra from a few hours’ trade?


“Labour want to keep taxes off big businesses while asking households to pay higher council tax, small business to pay higher rates and have already increased National Insurance.


“While Labour, Tory and Lib Dem form another coalition against Scotland’s interests in this budget and at the coming election the SNP will work with households, small business and communities to make Scotland better and to protect our essential services.”

ENDS


Notes


In the draft Budget 2010/11, the SNP Govt announced an increase in business rates paid by large retailers. This will raise £30m – of which 75% will be paid by the ‘Big 4’ supermarkets. Tesco, ASDA, Sainsbury’s and Morrison’s have complained publicly that this rates increase is ‘unfair’[1]. A simple comparison of the small rates increase and the massive profits of these supermarkets expose this claim as nonsense:[2]




Retailer      Extra to pay (estimated)       Turnover 09/10 (£m)       Time taken to make increase


Tesco              £8.5m                                  £42,254                         1 hour 46 minutes

ASDA             £8.4m                                  £19,819                         3 hours 43 minutes


Morrisons        £4.1m                                  £15,410                         2 hours 20 minutes


Sainsbury’s      £2.5m                                  £19,964                         1 hour 6 minutes


Total               £23.4m


















[1] “Hike in rates “will drive out top retailers” Scotland on Sunday, 19th December 2010

[2] Estimated rise in rates based on research by Ryden Consultants taken from above SoS article. Turnover figures supplied by Spice, available on request.