The campaign for a local levy on large retail outlets is being led at national level by Local Works, which promoted the Sustainable Communities Bill.
The Act, finally passed in 2007, forces Government to consider requests from local communities (passed to them via their local authorities) for changes in legislation which would promote the economic, social and environmental well-being of their areas.
One such proposal, a levy on retail units with a rateable value of over £500,000, would help to redress the imbalance in the non-domestic rating system between large and small businesses, as rates tend to be a larger proportion of the overall costs for small businesses. A levy of 8.5% on the 60-odd large retailers in the Sheffield area (half of them in Meadowhall) would raise over £6m per annum which could be used by the local authority to boost the local economy.
The catalogue of damage caused by large retailers, especially the giant food chains, is all too familiar:
- They have driven small retailers from the high street: by the year 2000 there were only a quarter the number of the butchers and greengrocers as in 1950 (note 1)
- Over 3 million people are employed in retail (1 in 9 of all jobs in the UK) (note 2). Small, family-owned businesses sustain more jobs, in terms of sales, than big stores – pound for pound, about double the number. Far from creating new jobs, new supermarkets cause a net loss of jobs in the local area (note 3).
- 50% of the turnover of independent retailers goes back into the community, compared to 5% from supermarkets (note 4).
- Other detrimental effects include excessive pollution and environmental impact (e.g. food miles and packaging), confusing discounting techniques, planning blight, damage to community life and poor working conditions including the use of migrant labour by contractors and subcontractors.
Bringing in a local levy would provide some redress for these damaging effects and the money could be used to support small businesses, especially in the retail sector. Large retailers form a strong lobby and have close links to government at national level.
Despite the rhetoric about localism, the direction of travel in politics is for central government to remove power and resources from local authorities. It will therefore require a strong grass-roots campaign to force government to change the legislation to allow a local levy. The Sustainable Communities Act provides a mechanism for such a campaign.
The Green Councillors on Sheffield City Council have proposed a motion (note 5) calling on Sheffield City Council to kickstart the Sustainable Communities Act process in Sheffield by consulting with local groups on this local levy proposal. We are very pleased to have the support of the Federation of Small Businesses.
(1) Competition Commission – The Supply of Groceries in the UK Market Investigation 2008 (pdf 8MB – large file)
(4) Federation of Small Businesses – Keep Trade Local Manifesto 2008 (pdf 1.3MB)