Erikka Askeland: Tesco Tax is back . . . and this time it could turn into a real contender

JUST when you thought the "Tesco Tax" was dead, Nicola Sturgeon delivered a jolt to its corpse with the announcement at a hustings yesterday that the SNP would revive it if elected to government. Good timing, Nicola. Just the day before, Tesco unveiled yet another record profit.

The 3.8 billion that the retailer hauled makes the SNP's scheme to raise 30m through a levy on large retailers look like mere toenail clippings. And except for the relentless retail and business lobby that thought it slew the proposed tax in January, most voters likely think it was a fine idea.

Although it wasn't laid out in the SNP manifesto, making the retail levy an election issue was long on the cards.

The SNP's plan was rejected by two separate parliamentary committees and subsequently by the full parliament. But much of the opposition to the idea was due to internal politicking rather than any deeply held sympathy for "big box" retailers on behalf of Scottish politicians.

Both Labour and the Lib Dems drummed up outrage against the levy despite grass roots support for the plan. In fact, it seemed plain odd that Labour in particular would be defending the profits of some of the biggest companies in Britain against the interests of the people who were bearing the brunt of cuts and tax rises, as well as small, independent retailers who thought adding a wee tax on the big boys would level the playing field. But that's the topsy turvy world of Scottish politics for you.

Sturgeon's cry of havoc will be sure to wake again the dogs of the retail lobby, particularly as the SNP steams ahead in the polls. Already the CBI has raised the question of what other tax rises the Nats may be hiding up their sleeves that haven't yet been mentioned. The levy, and maybe other potential moneyspinners like scrapping of empty property rates relief, will likely be viewed by whoever wins Holyrood as a way to pay for all those election promises like free university tuition.

Not only do they face the grasping claws of politicians with budget gaps to fill, but the lobby might yet see one of its key planks kicked out from under it. Part of the argument against a Scottish retail levy was that it would send retailers and their jobs and investment running screaming south of the Border.

But the past three months in politics has been a long and dreary one, soundtracked by the scary music of cuts and austerity. Having already raided the North Sea, the coalition has started toying with the idea of an English (and presumably Welsh) retail levy. David Cameron's favourite think tank, ResPublica, recently published a paper supporting something very similar to the SNP's retail tax, as long as the money was ploughed back into the high street.Interestingly, when grilled by MSPs about her opposition to the levy, Fiona Moriarty, director of the Scottish Retail Consortium, admitted that retailers might look more kindly on the tax if proceeds were ring-fenced to rejuvenate the city centre retail patch.

And the sector could most certainly use a boost. Figures this week showed that retailers are facing a second recession as fearful shoppers tighten their belts. Even Tesco is feeling the crunch as UK like-for-like sales slipped in the quarter to the end of February. But poor sales will be sure to close down even more high street retailers where empty shops and forlorn to-let signs are already spreading like weeds.

So it will be the increasingly gloomy and derelict high street that will be the battleground on which the next Tesco Tax war is fought.

If the SNP wins the election, there is no doubt we will see plans for the levy resurrected in Scotland. But the Scottish Government must resist the temptation to use the money to plug gaps in funding and use it to support this flagging sector.

Construction sector suffers and fears there's worse to come

GROWTH in the Scottish economy slowed slightly less than it did in England in the final quarter of 2010, but that's no reason to feel smug. A 0.4 per cent drop is still grim news, although it wasn't as bad as feared.

It is convenient to think it was the snow what done it, and there was an expectation that even more of the stuff up here would have made things worse. It didn't, but the figures revealed by Scotland's top statistician show some serious cause for concern.

The biggest sector dip in the quarter was construction, down 2 per cent. Overall, the sector had grown 11.2 per cent in the year, but Michael Levack of the Scottish Building Federation poured scorn on the notion that the full-year figures meant anything good was happening. Rather, the 2 per cent quarterly fall might be just the beginning of the withdrawal of public funds that kept the builders busy last year working on affordable housing schemes and infrastructure projects.

Even this wasn't enough to prevent a worrying 11 per cent rise in bankruptcy among building firms.