General Chat

I think this is a stupid Idea, councils are restricted to how much they can increase the Council Tax by, this would only result in shoppers having to pay higher prices - I think it is a way of increasing Council Tax by the back door.

A group of local councils in England is formally asking the government for new powers to tax large supermarkets.

BBC News has learned that Derby City Council has called for the right to bring in a new levy as a "modest" effort to ensure supermarket spending "re-circulates" in local communities.

Some 19 other local authorities back the so-called "Tesco tax", which could raise up to £400m a year.

The government said additional taxes on supermarkets would push up food prices.

http://www.bbc.co.uk/news/business-28495631

What do you think about such a tax?

Too late.

It should have been introduced years ago, before we lost all our little shops and the supermarkets opened their own.

We all enjoy paying tax just as much as the Devil likes being sprinkled with Holy Water.

The problem relates to all retail chains not only supermarkets and is as old as the hills.

The complaint is that a retail chain does not add value to the local economy but instead sources its products anywhere and everywhere while profits all go to remote shareholders.

The upside is that the chains bring in the latest products, lower prices and jobs. There used to be a good deal of truth in this.

However in 2014 retail product innovation whether in High St chains or shopping malls and parks is poor, real price competition next to non existent and wages rarely much above the MW for most.

Hence the success of Aldi, IKEA, Amazon and so on while many anchor brands have gone bust or nearly so while even Tesco is looking into the abyss.

Any kind of extra tax on the supermarkets will as OFITG says just push up prices or ruin the case for the kind of store upgrades which most of Tesco's empire so urgently needs. And in any case as Sharon says it is way, way too late.

Small independent shops can do just fine if they are flexible about hours - too many are still stuck in 9-5:30 - add a real internet/smart phone presence and offer some added value. Locating to areas where people still have spare cash is also a good idea so avoiding, say, south Manchester or east Sheffield is a no brainer.

They could do even better without the absurd levels of council tax and hyper rents imposed by landlords. The current Tories are the most landlord friendly party ever known while it is unlikely that Milliband's bunch of dreamers will ( if in power ) do anything to really cut the cost of living such as reducing commercial council tax.

The truth of it is that real standards of living are between Scylla and Charybdis. On the one hand there is the rapacious government with pensions, deficits, the NHS, the US armaments industry and so on to fund and on the other the financiers and landlords who are screwing down real wages.

For the majority the next 20 years or so will only see things getting even worse whatever the arrangements at Westminster. There will be another massive financial crash as more and more people default on ill judged mortgages. Most likely the property will be taken over by HSB and left empty or filled up with Chinese while Londoners sleep 6 to a room. I was going to say Hackney but of course even Tower Hamlets is already out of reach for most unless they have HB or an inside track to the local mosque. The City of London geeks have noticed that TH is in zone 1/2 and it is being "gentrified" at speed. Even Walthamstow, home of East Enders.

The poor will be marginally less poor with Labour, the rich slightly richer with the Tories. The skill of the Tories is convincing millions of people with no job security, a huge mortgage, 2 yr old Insignia on finance and enough cash flow to finance a family holiday in Orlando that they are rich. Labour have the presentational skills of a knacker's donkey. ( vote for me. I look like an idiot, sound like an idiot but trust me !!! hmm..... )

Given that Scotland already has this idiotic tax and that UKGov is going to allow a Scotland that votes to stay in the union to indulge in unlimited fiscal madness funded by the English I can only hope that Salmond gets his yes vote.

:-|

I do not profess to know the ins and outs like Rollo The Red.

I was unaware that we have this tax in Scotland, but I really
hope that Alex Salmond does not get the yes vote.

Emma

Emma & RolloTheRed,

I know that in 2011, supposedly, to offset funding cuts by the UK government, John Swinney, the Cabinet Secretary for Finance in the Scottish Government, announced plans for a £110m windfall tax on supermarkets which sell alcohol and cigarettes.

I did not follow this story closely, so don't know whether it was introduced as a once a year windfall tax or as an increase in their business rates - I believe it was introduced in one form or the other, much to the annoyance of those retailers affected by it.

Regarding small shops. One of the reasons they close. We have a small parade of shops our end of our large village. The bank has just closed there. Hairdresser said on Thursday her prices have to go up as the Landlord (who lives in another county let alone town, has put the rent up 60% (he wanted it to be 100%), and he could not care less about our village. We had an enormously long fight to get him to repair the car park which had pot holes in pot holes.

According to classical economics ( as taught in schools anyway ) if a landlord ups the rent too far then he will not have a tenant and thus no return on capital. The tenant can only pay according to the nature of his business of course. So in this beautiful free market rents self regulate. (*)
Mr Gove has made it illegal to teach anything else.

In real life the fairly unsurprising result is that useful shops tend to go out of business to be replaced by betting shops, pay day lenders and charity shops. The only real alternative for an independent is to own the freehold. Far too many have very unwisely sold the freehold encouraged to do so by their bank who makes money on the deal. The bank makes even more money when the firm goes bust as a result of sale & leaseback or interest swaps.

Less obvious is that the landlord can make even more money by getting rid of all his tenants and having empty property. How so ? Well an empty block of shops in an area with prospects ( not south yorkshire for instance ) is worth more than one with tenants as it has "development potential".

The landlord in the prized possession of an unencumbered block with prospects can now use it as security to buy more property with potential such as an ex social housing empty block of flats in Pimlico.

And so on.

So now you know why the UK GDP WHICH INCLUDES INCREASED BOOK VALUE OF COMMERCIAL & RESIDENTIAL PROPERTY is going up while at the same time what many people perceive as the real economy ( making things, media, health services, construction and so on ) is going south taking real wages with it.

It is not in the interest of the property owning sector to increase the amount of property available enough to reduce rents and mortgages. Far from it.

Pretty obviously then none of this will change if D&G keep their boutique finance shop on the road after June 2015. Less obviously nothing much will change if Labour win as (a) they are too thick to understand this and (b) are terrified of international finance and react to any kind of threat like a rabbit in the headlamps. UKIP will in the end destroy the Labour party not the Tories - this is already happening in France.

enjoy

(*) As it is nearly 4 Aug 1914 it may be worth remembering that over a million men died fighting for the none existent freedom of markets and the right to work and the freedom of voting which excluded half the adult population. 1926 was a very close shave for the upper class.
<3

Would these be the same councillors who gave planning permission for these supermarkets in the first place, often against stiff opposition from residents I wonder?

Yes.

The supermarket then promises to release several million quid for "community projects" and ""affordable housing" etc etc. The supermarket gets run up ok and some of the projects may come up through the cracks but by and large the disbursement of the CP funds is very opaque.

It is all a lovely carousel and those with a seat ain't sayin' nuttin'. SEE Big Society. There is nothing new in it though - England has been run like this since the middle ages. "You tickle me Toby and I'll tickle thee" (Yorkshire proverb).

Sometimes one of the killer wales gets beached and it opens a window onto what goes on. Google for "Richard Carr" bankrupt Bournemouth and you'll see.

:-|

Hi Rollo.
I was going to say more or less what you have just posted,

the "developments" often included new roads, accesses, and road junctions, in the deal,

Our local sainsburys have a junction into their carpark...........controlled by traffic lights, which seem to give priority to the inzit and outzit of the carpark irrespective of the traffic that needs/wants to go straight on.....