Belfast Telegraph

Friday 28 November 2014

Tax urged on out-of-town shops

Councils want a tax on large out-of-town shops and supermarkets
Councils want a tax on large out-of-town shops and supermarkets

Cash-strapped town halls need a tax on large out-of-town shops and supermarkets to pay for improvements to local shopping areas, a group of councils said.

Derby is leading a coalition of 20 local authorities which has made a fresh bid for the introduction of a levy worth up to £400 million a year under a scheme encouraging local action.

But the Department for Communities and Local Government (DCLG) made clear it remained opposed to such a move, arguing it would hit poor families by pushing up food prices.

And the former retail chief who proposed a one-off raid on the profits of retail giants to fund the regeneration of declining high streets warned it must not become a regular charge.

The submission has been made under the terms of the Sustainable Communities Act which encourages local initiatives and would apply to stores with a rateable value of £500,000 or more.

A similar scheme operates in Northern Ireland and a levy has been used in Scotland to fund health services dealing with the effects of smoking and drinking paid by those selling tobacco and alcohol.

The leader of Derby City Council Ranjit Banwait told BBC Radio 4's Today the life was being "sucked out of the city centre" and smaller shopping areas by the large stores.

"We are desperate for some sort of consistency from the Government.

"We have experienced, like most councils across the country, the worst cuts in history.

"The Government has been saying we've got to get on with it but then we are denied opportunities to come with innovative ideas like this."

While they made a wider contribution, he said, there was "no doubt" supermarkets had contributed to the decline of local retailers and should be help more responsible for reversing that trend.

The submission - which is backed by Tory and Liberal Democrat-run authorities as well as Labour-controlled Derby - is described as "a modest attempt to ensure more of that money re-circulates within and continues to contribute to local jobs and local trade".

Former Iceland and Wickes boss Bill Grimsey called in his recent review of high streets for a one-off tax on major retail chains and leisure groups to fund regeneration.

He said of the council's bid that it should not be an annual levy.

"If it's used simply to plug council budget shortfalls, it won't be fair and it'll be anti-business. This has to be about the High Street, not clobbering big business."

The Scottish levy is due to end next year.

A DCLG spokesman said it had rejected a previous scheme and remained opposed.

"Imposing new, additional taxes on supermarkets will push up the price of food and the cost of living, hitting low-income families the hardest," he said.

"We ruled out such a bid for higher taxes under the last round of the Sustainable Communities Act proposals.

"There are much better ways to support small shops."

Targeted business rate discounts, planning changes and action against "over-zealous parking practices" were among existing initiatives, he said.

"The Localism Act has also given councils new powers to introduce local business rate discounts. This is part of a series of steps by the Government to help support local shops and local high streets and spread best practice by councils."

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