Glasgow’s biggest stores have come up with more than a million reasons why a controversial new tax should not go-ahead.

It was claimed today the Scottish Government’s so called ‘Tesco Tax’ will force 17 of the city centre’s largest shops to stump up more than £1 million in extra business rates.

And there are fears shop units on Sauchiehall Street, Buchanan Street and Argyle Street – Glasgow’s Style Mile – will be left empty as top retailers set up shop on cheaper high streets in England.

There has been an angry backlash to the shock proposal by Scottish Finance Minister John Swinney to force the country’s biggest supermarkets and stores to pay an additional £30m in rates.

He said the extra cash would be ploughed into a central pot and distributed among the country’s 32 councils to help sustain and improve public services.

Only those shops with a rateable value of more than £750,000 will be targeted by the Scottish Government, meaning, out of the 1200 properties in the centre of Glasgow, just 17 will have to pay the tax.

But they represent some of the city’s biggest businesses.

Buchanan Street is the busiest shopping thoroughfare in the city and is home to the biggest stores.

The John Lewis Partnership has a rateable value of £2.1m and if Mr Swinney’s tax plan goes ahead it will have to pay out an extra £237,000 in business rates.

House of Fraser at the other of the street will need to find an additional £229,000.

Debenhams in Argyle Street will face a rates bill of £220,000 while British Home Store in Sauchiehall Street will be hit with a demand for an extra £14,000.

The tax hike will be a double whammy for some chains.

Marks & Spencer will have to pay out an additional £14,000 for its store in Sauchiehall Street and another £200,000 for its Argyle Street outlet.

Fashion giant Primark faces a combined new bill of £28,000 for its stores in both streets.

Scott Taylor, head of the City Marketing Bureau, said: “This is a direct attack on Glasgow. It will mean Scotland will no longer have a level playing field.

“There is a real fear that retailers will opt to invest in new stores on England’s high streets.”

Glasgow Chamber of Commerce has also come out against the new tax.

Chief executive Stuart Patrick said: “An economic environment which is conducive to future investment and growth is of vital importance to Glasgow. Any proposal which could possibly obstruct such progress must be looked at again.

“We have already had feedback from some of the city’s major retailers that this proposed tax could adversely affect their future growth plans.

“That in turn could result in Glasgow becoming a less attractive proposition for retailers planning to set up in the city.

“I would urge the Finance Minister to reconsider this levy.”

Store chiefs are furious about the tax plan but are reluctant to criticise the Scottish Government in public.

A spokeswoman for M&S, said: “It’s our policy not to comment or speculate on proposed legislation.”

However, a spokesman for the John Lewis Partnership admitted: “It is true that the tax will not simply affect supermarkets but will have a significant impact on large retailers in city centres as well.

“The John Lewis Partnership has serious reservations about this proposed levy and we are making our concerns known to the Scottish Government through the Scottish Retail Consortium (SRC).

SRC director Fiona Moriarty said dozens of rival stores and supermarkets were opposed to the controversial retailers’ levy.

She said: “Retailers are demonstrating their commitment to Scotland by opening more stores and employing a growing number of local people.

“It would be terrible to see that growth slowed or halted as a result of the Scottish Government enacting a policy which will make the country a less welcoming place to do business.

“Preventing this ill-conceived measure from going ahead will be crucial to Scotland’s economic security in the months and years ahead.”

Gordon Matheson, leader of Glasgow City Council, added: “We would be concerned about any proposals which would affect the competitiveness of retailers in the city centre.”

But Mr Swinney defended his tax proposal.

He said: “By raising an additional £30m in revenue from only the very largest retailers – or 0.1% of business properties – we can provide more investment in economic recovery and local services, from which almost all businesses benefit.”

And a government spokesman added: “The additional resources raised can be used to maintain frontline services that councils provide to businesses and to contribute towards the small business bonus scheme.

“Firms benefiting from the small business bonus scheme in Glasgow made an average saving of £1804 in 2009/10.”

General manager Peter Beagley said: “This proposal would be yet another tax burden on business and future employment opportunities.”

Top shops could flee south if tax hits profits

By Catriona Stewart

Multi-million pound expansion plans at Buchanan Galleries and St Enoch Centre could be hit if the controversial ‘Tesco Tax’ gets the go-ahead.

There are fears that top UK and international traders will boycott Scotland in favour of less expensive retail locations down south.

The economic downturn and poor Christmas trading underlines the difficult times facing retailers.

And there were real fears today that any new tax will drive business away from Glasgow which has worked hard over the years to lure top fashion stores to the city.

The £100 million revamp of the St Enoch Centre saw toy shop Hamleys open its first UK flagship store outside London.

The world-famous children’s favourite opened in October 2009 with bosses saying they chose Glasgow because of its status as the top place to shop outside London.

Hip American brand Hollister unveiled its new city centre store in October last year.

Biker chic favourite Belstaff and designer Vivienne Westwood opened stores in Princes Square in 2009.

And accessories brand Folli Follie, lingerie boutique Agent Provocateur and T-shirt shop American Apparel have all chosen the city for their first Scottish outlets.

Cult fashion chain COS also chose Glasgow for its first Scottish store, which opened in March last year.

COS was launched in 2007 and has its UK flagship store on London’s Regent Street with another 22 across Europe, including three in France and one in Spain.

In 2007, handbag shop Mulberry set up in Ingram Street while computer firm Apple opened a flagship store in Buchanan Street.

What the stores could be charged...

Glasgow’s top stores will pay the following if the Scottish Government goes ahead with John Swinney’s new tax plan:

BUCHANAN STREET:

Zara – £17,500

House of Fraser – £229,000

USC – £14,000

All Saints – £18,000

New Look – £18,000 H&M – £18,000

John Lewis Partnership – £237,000

Boots the Chemist – £18,000

Next – £15,000

HMV – £14,500

SAUCHIEHALL STREET:

British Homes Stores – £14,000

Primark – £14,000

Marks & Spencer – £14,000

ARGYLE STREET:

Gap – £14,000

Marks & Spencer – £200,000

Primark – £14,000

Debenhams – £220,000

The Tesco Tax from those 17 traders alone would net the government an extra £1,089,000.