Twenty local councils across England have proposed a government tax on large supermarkets, in order to collect money that would improve small businesses, local parks and surrounding communities. Known as the “Tesco tax,” the levy could generate up to $678 million a year, however, the government argues that these additional taxes on supermarkets would increase food prices.
In the proposal, made possible by the Sustainable Communities Act, which allows local councils to suggest solutions to community issues, the Derby City Council claims that large supermarkets damage the local communities’ economies.
The council’s statement said, “Research has shown that 95 percent of all the money spent in any large supermarket leaves the local economy for good, compared to just 50 percent from local independent retailers; this levy is a modest attempt to ensure more of that money re-circulates within and continues to contribute to local jobs and local trade.”
A similar tax is already in place in Scotland and Northern Ireland. It could also be applied to other big retailers including home goods behemoths Ikea, Homebase and B&Q.
A spokesperson for the Department for Communities and Local Government (DCLG) told The Telegraph that it had already rejected a similar proposal and remained opposed to the idea because price rises would “hit low-income families the hardest.”
The government has six months to respond. If agreed to, the tax will be applied to all councils in England.