MINISTERS have been accused of misleading the public over a £95 million "public health" tax on cigarette and alcohol retailers after a damning study found no evidence that the cash raised was ever spent on health initiatives.
Researchers said the Scottish Government had caved under lobbying from major supermarkets opposed to the Public Health Supplement to cut both the cost and duration of the levy, and that contrary to claims it would fund public health interventions related to smoking and alcohol abuse there was "no evidence that [the revenue raised] was earmarked for health".
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The study, published in the Milbank Quarterly journal of health policy, said that plans for the tax were unveiled by then-Finance Secretary John Swinney in September 2011 with "a clear public health rationale...to reduce the economic desirability for large retailers of selling alcohol and tobacco products and increase revenues for preventive health spending".
However, the authors, from Edinburgh University's school of social and political science, said this objective was soon abandoned amid industry pressure, with the tax never set high enough to discourage retailers from selling cigarettes and alcohol.
They wrote: "Our analysis suggests that the Supplement was not designed in such a way as to stimulate behavioural change among retailers, and that the revenues were not [ring-fenced] for health, but used to address a gap in the Scottish Government's Spending Review proposals.
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"It could therefore be argued (as many of our interviewees did argue) that the presentation of the Supplement as a 'public health' measure was misleading."
The tax, thought to be the first of its kind, raised £95.9m from 2012 until it was scrapped in March 2015. It targeted retailers selling both alcohol and tobacco products whose premises had a rateable value of over £300,000, landing major supermarkets such as Tesco, Asda and Sainsbury's with the biggest bills.
At the time, supermarket bosses and trade bodies argued that the tax would hit profits and discourage the chains from expanding in Scotland.
The authors found that the "public health" rationale for the tax was eroded between its announcement and its implementation six months later "as a direct result of the lobbying and scrutiny of large retailers", and that NHS Health Scotland - the body tasked with improving Scotland's health - was never consulted.
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Documents obtained for the study under freedom of information reveal that during a private meeting with executives from Asda, Morrison's, the Co-op, and Tesco on October 17 2011, Mr Swinney reassured them that the levy was "not an attempt to limit sales or to force retailers to cease sale of these goods" but to create "a new funding stream to support the long-term sustainability of public services".
The authors write: "Policymakers moved away from any clear commitment to pursuing public health goals via the supplement, or [ring-fencing] the revenues for public health, and increasingly emphasised a far less specific connection between the Supplement and agreements with local authorities to increase preventive spending."
Since the cash was collected by local authorities it was "difficult to trace" where it ended up or determine whether there had been any net increase in public health spending as a result.
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They researchers added that while Mr Swinney promised that the Government would develop "robust mechanisms" to monitor the effectiveness of the tax on public health, retail employment and revenue generation, following a request from MSPs, they had been "unable to find any evidence of such reporting".
A Scottish Government spokesman said: “Our 2011 Spending Review document stated clearly that the revenue generated from the Public Health Supplement would help fund preventative spending.”
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