Tax: Scotland Plans to Enact “Health Levy”

Swinney talks about "health levy," says alcohol and tobacco put burden on public spending

Swinney talks about “health levy,” says alcohol and tobacco put burden on public spending

On Wednesday Scotland’s government announced their new way to increase revenue and protect public spending on health care and policing. This will come in the form of a “health levy” on retailer of tobacco and alcohol.

Budget cuts

Finance Secretary John Swinney said that Scotland had reduced 2011-2012 spending by 1.3 billion pounds as a result of the coalition’s funding cuts. Swinney said that the coalition “imposed the most swingeing public cuts in the country since the Second World War.”

Swinney’s new “spending review statement” sets out expenditure plans until 2015, with the health levy being a key issue. He said he worries how the Westminster government’s deep budget cuts will result in the long run.

“We have argued consistently that the UK government is cutting spending too far and too fast and that its actions run the risk of damaging the fragile recovery in both Scotland and the UK,” said Swinney.

Raise tax to keep policies

Swinney said that despite billions in budget cuts, Scotland would still preserve what it feels are key policies. These include free medical prescriptions, health care, the council tax freeze, and free higher education.

He also said that abuse in alcohol and tobacco are creating an extra burden on the health care and policing systems.

“As such, I propose that the business rates paid by large retailers of both tobacco and alcohol will be increased by a supplement from April 1, 2012,” said Swinney. This is one of the “difficult decisions” that Swinney said were necessary to make in his spending review statement “to sustain the public finances and public services.”

The Finance Secretary also spoke about the public sector pay freeze, which he said would be kept through 2012-2013, but any employee earning less than 21,000 pounds would get their pay rise of at least £250 pounds.

“Ministers will also be freezing their own pay in 2012-13 for the fourth year in succession,” Swinney said. He aims for 2012-2013 to be the last year of a pay freeze.

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