Swinney Budget plans

Large retailers selling cigarettes and alcohol will be hit with a new ``public health levy'' as part of the SNP's budget plan.

The tax, to be imposed through a business rates supplement, was announced by Finance Secretary John Swinney in a statement to the Scottish Parliament today.

It follows an earlier failed attempt to set a wider tax on out-of-town retailers to raise about #30 million.

The SNP now has a majority at Holyrood, meaning opposition parties do not have the numbers to block the new proposal.

Mr Swinney also announced a further one-year freeze on public sector pay - including the wages of government ministers.

And he warned that pension employee contributions will have to be raised for teachers, NHS, police and fire schemes unless the UK Government changes its own plan for increases.

Mr Swinney told MSPs that his spending review falls at a ``defining moment'' against the backdrop of a fragile global economy and ``savage reductions'' from Westminster.

But he said the SNP government is committed to preventative spending measures, designed to set a long-term course.

``In order to support the shift to preventative spending, I have looked to increase revenue for this purpose,'' he said.

``Scotland's health and social problems associated with alcohol and tobacco use are well documented and are something we are firmly committed to addressing.

``These problems affect not only the health of the population, but create additional burdens on policing, local authorities and the NHS.

``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.''

Although further details have not been made available, Mr Swinney said any income will contribute to measures carried forward by the Scottish Government, local authorities, the NHS and the voluntary sector.

Mr Swinney described ``tough choices'' needed to balance the books, calling for further savings in public services.

He said: ``To help maintain staffing levels it is essential that we continue to control pay growth and keep pay at an affordable and sustainable level.

``The pay policy for 2012-13 therefore extends the freeze on basic pay and suspends access to bonuses for a further year.''

Any employee earning less than #21,000 will continue to receive at least a #250 rise in their salary.

Mr Swinney continued: ``My aim is that 2012-13 will be the last year of a pay freeze and we may be able to see modest increases in the years that follow.''

On pension contributions, he said the Conservative-Liberal Democrat UK Government is taking the wrong course of action.

He warned: ``Should the UK Government refuse to change its position, the Scottish Government will have no choice but to apply the increases in employee pension contributions for NHS, teachers, police, and fire schemes in Scotland.

``We will put in place protection for the low-paid and we will leave decision making on the local government pension scheme to those who manage the scheme.

``We will not impose on local government in Scotland what the UK Government has imposed on us.''