We are currently trialling our new-look independent.co.uk website - please send any feedback to beta@independent.co.uk

Business News

Councils want 'Tesco tax' on big supermarkets

Councils claim supermarkets damage the sustainability of communities and the tax would mean more spending was retained locally

A number of local councils across Britain are requesting powers to tax large supermarkets in order to ensure customer spending is “re-circulated” in local communities.

Around 19 local authorities back the so-called ‘Tesco tax’ proposed by Derby City Council, according to a report by the BBC.

It is thought that the levy, which would be similar to business rates could raise £400m a year. A charge of up to 8.5 per cent, it would affect large retail outlets with a rateable value over £500,000.

The government argues that any additional tax would mean an increase in food prices. A similar system to that proposed is however already in place in Scotland and Northern Ireland.

In its submission, Derby City Council argues that big supermarkets, despite bringing some benefits, on the whole damage the sustainability of local communities.

“Research has shown that 95 per cent of all the money spent in any large supermarket leaves the local economy for good, compared to just 50 per cent from local independent retailers; this levy is a modest attempt to ensure more of that money re-circulates within and continues to contribute to local jobs and local trade,” its report says.

The councils wish to hold on to all money raised rather than sending it to central government for redistribution. It is proposed that the funds be used to support small businesses, community centres and parks.