MacDonald slams Labour opposition to supermarket tax
Monday, 17 January 2011 06:19
Supermarket levy would provide new lease of life for struggling town centres in Falkirk district
The SNP’s candidate for Falkirk East, Councillor Angus MacDonald has denounced Labour’s opposition to the SNP’s plans for a £30 million rates increase for the nation’s largest supermarkets and retailers.
This tax would only apply to retail properties with a rateable value over £750,000, which in Falkirk district would only affect 6 supermarkets (3 ASDA, 2 Tesco and one Morrisons).
Angus MacDonald, who is also the SNP’s Economic Development spokesperson at Falkirk Council said the Labour, Tory and LibDem opposition to the supermarket levy was “sacrificing small business, council tax payers and local services for supermarkets”.
Councillor MacDonald said the proposed supermarket levy would amount to just 2% of turnover and that Labour’s stance against the proposal was “offensive”, particularly when they were simultaneously calling for an increase in council tax.
Cllr MacDonald commented:
“The UK Government’s £1.3 billion cuts to Scotland’s budget leave Scotland facing no easy task in balancing its finances. But we at least have a responsibility to do it in a way that is just and fair.
“John Swinney proposed recently that supermarkets and large retailers in Scotland be asked for an extra £30 million in business rates between them. This was because some of the country’s largest and most profitable businesses are in a better position to find the money than struggling small businesses or council tax payers.
“The move by the SNP would provide a new lease of life for small shops and communities the length and breadth of Falkirk district which have been decimated due to the predatory corporate tactics of supermarket chains. For example I have seen at first hand the damage the introduction of supermarkets can have on town centres, not least Grangemouth, where the footfall in the town has dropped dramatically since the new ASDA superstore opened 3 years ago. In addition I have spoken at length in the council chamber warning colleagues against allowing any more supermarkets into Falkirk district as I genuinely believe we are now at capacity.
“Unwisely, Labour has not only joined forces with the Tories in opposing this measure, but they are actually campaigning for the council tax to go up in Falkirk district and throughout Scotland.
“Most people in Falkirk district will find it incredible that at the same time as they are campaigning for people’s council taxes to go up, Labour is demanding tax breaks for the largest and wealthiest supermarket chains in the country which between them are worth tens of billions of pounds. The £30 million figure equates to just one hours takings for the Sainsbury supermarket chain.”
“While there is no surprise that the Tories and their LibDem cohorts are supporting big business it is clear that Labour have mis-calculated their stance on this. I would have thought they would be supporting a policy which would ensure larger companies paid slightly more to protect local services and to freeze the council tax, however as we now know, Labour would increase the Council Tax at the first opportunity.
Councillor MacDonald said he was encouraged that the Federation of Small Businesses (FSB) is supporting the SNP plan.
“Almost three-quarters of Scotland’s businesses – 74% - support the SNP Government’s proposed ‘supermarket tax’, which aims to raise £30 million for public services”.
With 20,000 members the FSB, which represents Scotland’s small and medium enterprises, believes that the tax will help create a level playing field for its members when competing against the large corporate supermarket chains.
In their submission to Holyrood’s Local Government Committee on the proposed move, the FSB highlights that, despite claims the supplement will hit city centres, figures in the public domain suggest that 86% of the projected take (£25.7m of a projected £30 million) will be paid by the four major supermarket chains.
In the Committee’s hearing next week, the FSB’s Public Affairs Manager, Colin Borland, will argue that the SNP’s move willl bring more fairness and proportionality into the rates system.
Of local competitiveness, Mr Borland said,
”Supermarkets are here to stay. Their business model is incredibly successful and their record profits and turnover are testament to this. But, at a time when rising overheads are further squeezing margins in local small businesses, when cash-flow is tight and financial reserves depleted, it is now more important than ever that the playing field is levelled wherever possible.
”Progress has been made through the introduction of the Small Business Bonus. But rates are still a disproportionate burden for the small businesses who pay them, with nearly half citing them as a major barrier to their business success. Contrast this with the 225 largest retail properties whose bills, according to Scottish Government calculations, account on average for only around 2% of their turnover.
”It is for these reasons that three quarters of our members feel that it’s time for the largest out of town supermarkets – who benefit from free parking and other amenities our members don’t enjoy – to start paying more of their fair share.”
In 2006, the FSB in Scotland published a report (1) based on an extensive research study entitled, “The effect of supermarkets on existing retailers” – looking at how new supermarket developments affected town centres and independent retailers in Alloa, Dingwall and Dumfries. The full report’s conclusions were that, in each of the towns, a new supermarket meant:
• A decrease in the number of convenience retailers operating in the town centre;
• An increase in the number of vacant units and corresponding floorspace;
• A broad shift in convenience expenditure away from the existing town centre retailers to those operating the new supermarket development;
• A significant decline in the level of business activities undertaken by existing retailers. This is attributable in the main to competition from the supermarket; and
• A general acknowledgment in respect of a decline in the overall number of shoppers frequenting the traditional town centre.