MP backs call for levy on the large retailers

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A YORKSHIRE MP believes that introducing a levy on large retailers would help to revive the high streets of struggling towns and cities across the UK.

The scheme, which is being introduced in Northern Ireland next April, would see large retailers being charged to fund a rates relief scheme to help smaller shopkeepers.

Denis MacShane, Labour MP for Rotherham, said he believed that introducing the system in England would benefit towns and cities across Yorkshire, including his constituency.

A Department for Business spokesman told the Yorkshire Post yesterday that the system was one of the options retail guru Mary Portas had looked at when compiling her recommendations for what government, local authorities and businesses could do to help high streets recover.

But it was not included in her report on Tuesday because she did not think the scheme would work in the current economic climate.

Mr MacShane said: “The centres of smaller Yorkshire towns have been destroyed by out-of-town shopping developments, which do not accept their responsibility for being in partnership with smaller town centre shops, and I think measures to support town centres are long overdue.

“I think a levy on large retailers would help Rotherham and other towns but I also think that we could learn a lot from our European counterparts, which are livelier and stronger, with better chamber of commerce links to retail chains and councils.”

Many high streets in Yorkshire have struggled in the economic downturn, mirroring the national picture, which has seen town centre vacancy rates doubling in just two years.

Places like Bradford, Dewsbury, Rotherham and Hull, among others, have felt the brunt of retail struggles.

Ms Portas’s suggestions included creating new ‘town teams’ and developing the Business Improvement District model to “put town centres first”; removing red tape to make it easier for independent retailers to get started; encouraging affordable town centre car parking and introducing an annual national market day where budding entrepreneurs can try their hand at running a business.

She also advocated levelling the playing field by ensuring a “strong town centre-first approach in planning”, encouraging large retailers to show their support for high streets.

The Department for Business spokesman said: “Mary has considered many options in the course of the report, some of which involved levies on large employers. However, this was not an avenue she wanted to pursue in the current climate, and doesn’t feature in the recommendations.

“There is already a system of Small Business Rate Relief for businesses that occupy a single property below a rateable value – which many high street properties are eligible for. More widely, tax is a matter for HM Treasury and the Chancellor keeps all taxes under review.”

Jonathan Riley, partner at Pinsent Masons and vice chairman of Bradford Property Forum, said he did not believe the scheme would work at the moment.

“Even large retailers are struggling to make things work,” he said. “Most large retailers are looking for incentives from developers to move into new destinations and I can’t see them, at the same time, wanting to hand out money to people they see as competitors.”

Simon Reevell, Conservative MP for Dewsbury, said a levy could have the opposite effect of supporting high streets by persuading larger retailers to leave towns like Dewsbury.

He said: “If footfall is low then the danger is that the additional cost of a subsidy forces the larger retailer out which has a much larger impact on the town.

“M&S left Dewsbury because the rent became uneconomic from their point of view. If you could persuade another flagship store to come to Dewsbury you could give smaller businesses an incentive to follow. If you introduced a levy, that makes M&S think it’s more expensive to come back to somewhere like Dewsbury.”

He added: “It might work in somewhere like Leeds but in Dewsbury the danger is that you frighten them off.”

Sammy Wilson, minister for finance in the Northern Ireland executive, has said the levy is justified there because small businesses have been hit harder by the recession than the large retailers. He said the executive’s decision not to proceed with a revaluation of business rates in 2010 meant smaller retailers probably faced a higher rates bill than they should.

The levy is to be imposed for three years, by which time the Northern Ireland executive hopes a scheduled revaluation of business rates would be completed, creating a level playing field between large and small retailers.