Finance Minister Sammy Wilson: Tesco will not 'bully' us

Finance minister Sammy Wilson Sammy Wilson said the tax on larger stores such as Tesco will help small businesses

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Northern Ireland's finance minister has accused supermarket giant Tesco of attempting to "bully" the Stormont executive over business rates.

Sammy Wilson was defending the proposed increase in rates for larger stores which Tesco has said could affect potential investment of £100m.

The minister claimed that Tesco "must take us for idiots" to claim the investment is in jeopardy.

Tesco called the executive's proposals "the wrong tax at the wrong time".

Mr Wilson made similar comments in the Assembly on Tuesday but went further on Radio Ulster by saying that Tesco had attempted to "bluster and blow and bully" the executive.

The scheme will see a re-evaluation of rates on commercial premises with a rateable value of over £500,000. It is aimed at giving rate relief to smaller businesses.

Analysis

Sammy Wilson has characterised the battle to secure his retail levy as a fight with Tesco. This is clever politics. But his scheme isn't necessarily good economics.

The 20% hike in rates for big retailers will hit key Belfast City Centre traders like Marks and Spencer, Boots and House of Fraser. At a time when the high street has seen a massive drop in trade (down 10% in a year), there are concerns about anything which might add to those woes.

Belfast Chamber of Trade points out that small retailers need big retailers - they're all part of the mix. It supports relief for small retailers but would much prefer that it was funded via a charge on parking in out-of-town centres.

An analysis by the Northern Ireland Retail Consortium, which represents the big retailers, shows that more than half of the benefit will actually go to non-retailers. Bookies Ladbrokes are big winners with 27 stores that will enjoy rates relief. Northern and Ulster bank will deposit a handsome rebate too thanks to reduced rates on their branch network.

The strongest supporters of the scheme in its current form are the Northern Ireland Independent Retail Trade Association. However this organisation is controlled by the big wholesale groups and their members.

According to its 2009 accounts NIIRTA received £50,000 in a contribution direct from the wholesale groups.

Musgrave, owners of Centra and Supervalu, recently bought Irish supermarket chain Superquinn. That means they're now bigger than Tesco on the island of Ireland. Because the stores they supply tend to be small, they benefit from the retail levy - unlike their competitors Tesco who pay a large slice of the bill.

"Bluster, blow and bully"

The finance minister does not believe that the new tax rate will hold up Tesco's investment plans in Northern Ireland.

"It is not a huge imposition on a large company like Tesco but unfortunately Tesco think because of their economic power they can simply railroad us into doing what they want us to do," he said.

"For them to come up with the argument that this kind of tax is going to put £100m of investment in jeopardy really is pathetic and they must take us for idiots if they think we are going to believe that kind of rhetoric.

"It might well be that they have other reasons for deciding not to go ahead with this investment in the middle of a recession but don't let them put it on a policy which the executive had introduced at the budget.

"Tesco think that because they are a big company they can come in and bluster and blow and bully and they are not going to unseat what I believe is a good policy to help small businesses through the recession."

'Negative impact'

The Northern Ireland Independent Retail Trade Association (NIIRTA), which represents a number of wholesalers and independent retailers, welcomed Mr Wilson's comments.

NIIRTA's chief executive Glyn Roberts said: "Instead of making threats and providing no real alternatives, Tesco should outline their views as how to fund the Small Business Rate Relief Scheme.

"This scheme is about creating a level playing field in relation to rates between large and small retailers."

However, Belfast Chamber of Trade has warned that Mr Wilson's plans could damage town centres.

Chamber president Joe Jordan said: "Without the big retailers you don't have the wee retailers.

"If you start to look at one sector of that and start to damage that sector, I think it'll have a negative impact throughout the entire city."

A spokesperson for Tesco also criticised the minister's proposals.

"This new large retail levy, imposed at a very difficult time for all businesses, will mean less investment and fewer new jobs in Northern Ireland," they said.

"Everyone should be concerned about that. It is the wrong tax at the wrong time for Northern Ireland's economy and communities."

The plans have previously been criticised by the chief executives of ASDA and Sainsburys.

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