Colin Borland, Federation of Small Businesses
Cast your mind back a few years– when we thought top bankers were masters of the universe and credit crunch was a breakfast cereal. Back then, the big worry on the economic front was inflation and high commodity prices.
Of course, well-documented events soon sorted that out: demand dropped and the issue faded as we battled to save our financial systems from meltdown.
But, as things begin to pick up – and oil is back at over $100 a barrel – worries about inflation and rising overheads return. And, here in the UK, matters have not been helped by the rise in VAT and the ever-upward trend in fuel duty – at a time when business and consumer confidence is fragile.
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So, with cash-flow tight, it’s important that governments think hard before passing legislation which will either squeeze margins even more or put plans on hold by creating uncertainty. Which brings me neatly to the Social Responsibility Levy. This was resurrected and tacked on to the Alcohol etc (Scotland) Bill as it neared the end of its legislative journey at Holyrood. In essence, it lets councils apply to the Scottish Parliament to charge alcohol retailers a supplement which would compensate for the public service costs associated with alcohol abuse. The problem, though, is that the rationale for the levy hinged on the increased profits alcohol retailers were likely to enjoy as a result of minimum pricing and the subsequent desire to balance profit with social responsibility. Now, with minimum pricing defeated, any additional charges will have to be met from somewhere else in the business. And it’s not simply the affordability. Uncertainty about how it will actually work in practice has left businesses worried. Indeed, the Scottish Government has issued an initial consultation asking how the levy should be implemented, to which the Federation of Small Businesses (FSB) will be responding later this month. While not spelled out, the consultation questions suggest that there are basically three options on the table: a levy on the bad, irresponsible retailers; a blanket levy on everyone; a blanket levy, with exemptions and discounts for good practice. It seems fair that, if a scheme must be brought forward, it should specifically target problem premises. The other two options either simply declare the licensee guilty, or assume their guilt until it’s proved otherwise. But this still leaves problems. How, for example, do you identify who is an “irresponsible” licensee? To audit every licence holder regularly would be resource intensive. And how does one determine which premises should be held responsible for public disorder in an area with several nightclubs, pubs, off licences, hotels, wine shops etc.? And, with all three options, there is the question of how, if this levy is set to mitigate the cost of alcohol abuse, the extra money will actually get to the police and NHS. I’ve long said I’m proud that the Scottish Parliament has a Rolls Royce legislative system. Perhaps, though, laws like this mean it’s time it went in for a service.We need your support. Please donate to The Caledonian Mercury
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