A group of 20 English councils have petitioned the government for new powers to tax large supermarkets.
Derby City Council has used the Sustainable Communities Act to call for the right to bring in a levy to ensure that supermarket spending “re-circulates” in local communities. A further 19 other local authorities have backed the call.
The extra business rates levy, of up to 8.5%, would affect any large retail outlet with a rateable value of more than £500,000.
Government is legally required to consider the request, although not to agree to it. A similar request made in 2013 was rejected by ministers.
The Association of Convenience Stores (ACS) welcomed the fact that councils were “thinking about ways to direct more investment into the high street and help small businesses”. However, chief executive James Lowman said that allowing councils to add to business rates bills could “set a dangerous precedent.”
“This levy could apply equally to large retail stores in existing centres as well as out of town stores, which would not help high streets. There is also no clarity on how councils would reinvest any money raised, and the levy could become just general revenue-raising,” he added.
The ACS would prefer councils to show their commitment to the high street through greater commitment to town centre first rules in planning.
A similar tax already operates in Northern Ireland and Scotland.