Hard to avoid but difficult to sustain: Scotland’s innovative health tax on large retailers selling tobacco and alcohol

Context
In the context of increasing health spending and a constrained budget, the Scottish government levied a new “health” tax on large retailers selling alcohol and tobacco in April 2012. This innovative tax, the Public Health Supplement, had the potential to finance additional health spending while discouraging retailers from selling tobacco. We present a case study of the levy; examine how it evolved over time and what impacts it had; explore why, in 2015, the government decided to discontinue the policy; and consider how this experience might inform future strategies for addressing tobacco and alcohol harms via taxes on retailers.

Methods
We employed 3 data sources: (1) policy documents (both documents in the public domain and documents obtained via Freedom of Information requests), (2) media coverage of the debates surrounding the Public Health Supplement, and (3) key informant interviews. We analyzed these data collectively, in chronological order, triangulating between sources.

Findings
When the Supplement was announced in 2011, a clear health rationale was advanced. However, the policy, as subsequently implemented, was not designed to elicit a behavioral response from retailers in terms of alcohol or tobacco sales. It was successful in generating a predictable revenue stream, but there was no evidence that this was earmarked for health. Hence, the substantive health content of the policy was questionable, a fact that was highlighted by industry opponents of the tax, while there was also a lack of competing support from health interests. The industry's campaign was influential in the government's subsequent decision to reduce the rate of the tax and restrict its duration to 3 years.

Conclusions
A tax may be considered a “health” tax on the basis that it raises revenue for health spending and/or that it helps achieve health aims (eg, behavioral change), but there may be tension between these goals in policy design. Framing a tax as a health measure may increase public support in the short term, but this may not be sustained if such framing is insufficiently justified.