Belfast Telegraph

Sammy Wilson warned over store wars

By Claire Weir

Business chiefs have warned the Finance Minister his bitter war of words with Tesco could jeopardise major retail investment in Northern Ireland.

The dispute over Sammy Wilson's Large Store Rates Levy scheme flared this week after he accused the retail giant, which opposes the levy, of "bully boy tactics".

Under the proposed scheme, many of the biggest multiple retail stores here would pay additional rates and face an average hike in their rates bills of £85,000 a year.

Meanwhile, thousands of smaller traders would benefit from a reduction in rates in the Small Business Rate Relief Scheme.

Belfast Chamber of Trade and Commerce, which represents a large number of the stores which could be affected by the levy as well as smaller ones which could benefit, has now entered the row.

The body has warned the estimated £9 a week saving that the measure would bring to small businesses is not worth the damage it could do to larger ones.

Chamber president Joe Jordan said the Government should collect the skyrocketing amount of already outstanding rates instead.

Last week the Belfast Telegraph revealed that Tesco had warned that it could cut its planned creation of 1,500 jobs and £100m investment over the next three years if the proposed tax is introduced.

But a furious Mr Wilson branded the claim "absolutely pathetic", and accused the retailing giant of using "bully boy tactics".

He said Tesco chiefs either didn't do "their sums very well, or must think we're all a bunch of idiots".

"If Tesco's investment here is that perilous then I don't think it's a wise investment decision for them."

A spokesperson for Tesco responded: "We have set out respectfully to Sammy Wilson our fear that this new large retail levy, imposed at a very difficult time for all businesses, will mean less investment and fewer new jobs in Northern Ireland.

"Everyone should be concerned. It is the wrong tax at the wrong time for Northern Ireland."

Joe Jordan, of the Belfast Chamber of Trade and Commerce, said despite the argument that large out-of-town complexes damage town centres, big name retailers based in town and city centres actually attract more footfall.

"It's all very well Sammy Wilson fighting with Tesco. But meanwhile M&S, House of Fraser, Boots, which are big draws in places like Belfast city centre, are going to get hit too when they are already struggling with a drop in spend despite helping to generate footfall to the smaller businesses.

"We do agree with the extension of the Small Business Rate Relief Scheme, but this solution is ill-thought out and inappropriate."

But the Northern Ireland Independent Retail Trade Association (NIIRTA), which represents a number of wholesalers and independent retailers, welcomed Mr Wilson's comments.

NIIRTA's chief executive Glyn Roberts said: "Instead of making threats and providing no real alternatives, Tesco should outline their views as how to fund the Small Business Rate Relief Scheme.

"This scheme is about creating a level playing field in relation to rates."

NIIRTA's backers include some of the country's biggest wholesalers such as Musgrave and Henderson which control a large portion of the Northern Ireland market.

Because their stores are small, they'll benefit from the levy.

Major retailers Sainsburys, Asda, B&Q and Ikea have all said they are against the proposals.

A spokesman for Asda said that the tax, currently out for consultation, would make Northern Ireland a less attractive destination for investors.

Ikea said that its stores in the rest of the UK of similar size to the outlet in Belfast, already pay lower rates than they do in Northern Ireland.

This week it emerged that more than £150m is currently owed in unpaid rates and that the amount being written off has doubled on last year, up to £20m.

Joe Jordan added: "The money that large retailers would be asked to pay over the period is a tiny percentage of what is already outstanding - why don't Land and Property Services (the body responsible for collecting rates) tighten up their operations and the savings could be made there, instead?"

Background

The proposed scheme will see a re-evaluation of rates on commercial premises with a rateable value over £500,000 and is aimed at giving rate relief to smaller firms. The levy could see larger stores face an average annual rates hike of £85,000. The Executive has highlighted the levy would only be in place three years and that a similar proposal may be introduced in Scotland, where a levy on stores selling alcohol may be introduced.

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