Green bid to save our communities from large supermarkets

Green Councillor Sarah Finch raised a motion at the 18 December Council meeting asking Reigate & Banstead Borough Council to support efforts to save our communities from large supermarkets.

The Greens are backing a ‘supermarket levy’ – a charge of 8.5% of the rateable value on supermarkets or large retail outlets with a rateable annual value not less that £500,000. The money raised would be used to help improve local communities. [1]

Supermarkets have a net detrimental effect on the local economy. For example, while 50p of every £1 spent at a small retailer remains in the local economy, only 5p of every £1 spent at a large supermarket does so [2].

Yet despite the greater contribution small traders make to our economy, they are made to pay a far higher proportion of their turnover as business rates than the superstores. [3]

The levy as proposed would raise more than £500,000 a year from the five large supermarkets in Reigate and Banstead, though this Council could choose to set a levy lower than 8.5%, and a qualifying rateable value higher than £500,000, if it chose. [4]

This is already happening in other parts of the UK. In 2012, the Northern Ireland Assembly introduced an 8.5% local levy on retail outlets with a rateable value above £500,000. [5] The Scottish Parliament has passed similar legislation for a levy of 9.3%.

Cllr Sarah Finch said:

“There is lots of evidence that large retail outlets have a detrimental effect on the communities in their local areas. They take money out of the local economy, and studies have shown that the opening of a supermarket results in hundreds of retail job losses in the local community. [6]

“What we want is simple: for councils to have the power to put a levy on the large supermarkets in their areas and for that money to be spent to help boost local jobs, local trade, local services and local communities.

“This could have big benefits and help undo the damage caused by large supermarkets. Money would be taken away from these profit-hungry corporations and put back into the community.”

Cllr Jonathan Essex, who seconded the motion, said:

“Before 1990, councils used to set their own business rates in negotiation with local businesses. Allowing central government to take these powers to itself was how we got into this unfair mess in the first place.”

 

 

Notes :

[1] The motion reads:

This council resolves:

  • That a letter be sent to the Secretary of State for Communities and Local Government requesting that local authorities be given the power to introduce a levy of up to 8.5% of the rateable value on supermarkets or large retail outlets in their area with a rateable annual value not less that £500,000;
  • for the revenue to be retained by local authorities in order to be used to help improve their local communities.

[2] Federation of Small Businesses. 2008. Keep Trade Local Manifesto

[3] The Federation of Small Businesses estimates that business rates are five times more expensive for small businesses as a proportion of turnover than they are for large ones. This can act as a barrier to the formation and growth of small businesses.

[4] The five supermarkets in Reigate & Banstead with rateable values over £500,000 are Asda in Burgh Heath, Sainsbury’s in Redhill, Morrisons in Reigate, and Waitrose in Banstead and Horley.

[5] On 17 July 2012, on BBC News,Sammy Wilson, North Ireland Finance Minister, said of the levy:  “As far as investment is concerned, rather than see investment leaving Northern Ireland some of the big stores are actually going full steam ahead with new investment… As far as employment is concerned there has been no measurable impact in employment in the big stores at all.”

[6] Studies include:

  • Porter and Raistrick. 1998. The Impact of Out of Centre Food Superstores on Local Retail Employment
  • Craven, N. 2012. Riddle of Phantom Shop Jobs: Supermarkets Fail to Deliver 39,000 Promised Positions.
  • Association of Convenience Stores. 2011. Leading Supermarkets Fail to Deliver on Jobs for UK Communities

 

Read more about the campaign: http://localworks.org/pages/supermarkets

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