Poll: Large supermarkets and out-of-town retailers could face local tax to counter Colchester town centre decline

Supermarket levy

Supermarket levy - Credit: Eastern Daily Press � 2008

A tax on supermarkets to potentially boost Colchester’s economy by millions of pounds is being considered by the borough council.

A briefing document on the so-called Supermarket Levy will be presented to Colchester Borough Council’s (CBC) Trading Board tonight.

Being actively considered by a number of councils across the country, the levy would use legislation to effectively tax large retailers locally and invest the money back into “improving the economic, social and environmental well-being of their area”.

If a levy of 8.5% were applied to Colchester retailers with a rateable value of more than £500,000, it would generate £1.42million this financial year.

The Trading Board was set up by the borough council to consider a range of schemes, from the mundane to the bizarre, which might raise income for the authority.


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The report makes no recommendation as to whether the council should adopt the levy, instead outlining the policy and how it could work.

Tim Young, councillor for licensing at CBC, said: “I certainly think it is worth looking at. It would be remiss of us not to give it serious consideration.

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“We are well aware of the number of supermarkets which have been or are being built on Colchester and this would be one avenue of funding generally the cutbacks in local government funding.

“There is obviously the market here for supermarkets and it is up for them to put something back into the communities in which they want to operate.”

Michelle Reynolds, chairman of the Colchester Retail/Business Association, said the levy could be a welcome move if the money raised was committed to improving the town centre.

She said: “The threat to local businesses is out-of-town complexes, it is not a level playing field as they can offer free parking.

“These sites could be made to pay say £1 per day, or week, per free space and the money used to create free or cheaper town centre parking.

“Whatever it is called if we could have something to even up the playing field so we could all trade without the distortion that would be good. If you could bring back some equilibrium we would support that.”

However the levy does not have uniform backing from the business community.

Iain Wicks, development manager at the Essex Federation of Small Business, said: “While the levy is trying to do the right thing it is in the wrong way.

“The real issue for retailers is business rates as one of their biggest costs not grounded on performance or profitability. We are asking the government for a root and branch review of business rates.”

David Burch, director of policy at the Essex Chamber of Commerce, added: “We have quite considerable concerns and businesses are already taxed enough.

“There’s a projection it would produce quite a considerable income but businesses would not be assured it would be used for the best benefit, and instead be used to offset a loss of council revenue in other areas.”

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