English councils propose 'Tesco tax'A group of local councils in England is formally asking the government for new powers to tax large supermarkets.
BBC News has learned that Derby City Council has called for the right to bring in a levy as a "modest" effort to ensure supermarket spending "re-circulates" in local communities.
The council wants the right to impose a levy on large supermarkets, retain the money raised, and use it to help small businesses.
Let's set aside the strong suspicion that the money raised will never find its way towards 'small businesses' and will instead be funnelled into the half-baked schemes of the cranks who dominate local government (who, by the way, have done as much as anyone to ruin local retailers by jacking up parking fees and pedestrianising town centres). Instead, let's focus on the basic idea that successful businesses should be looted in order to prop up failing businesses.
It is hard to believe that there are still people - grown, adult human beings - who think that robbing Peter to pay Paul is a sensible way to run an economy. A hundred years ago, they would have been in favour of taxing the electricity companies to subsidise the candlestick makers. Forty years ago, they would have been throwing money at British Leyland. This latest wheeze from (Labour-run) Derby City Council shows that no matter how much the left insists that it has changed - no matter how much it recognises the benefits of the market economy - it still doesn't understand the basic principles of free trade. Hence, they say things like this:
"Research has shown that 95% of all the money spent in any large supermarket leaves the local economy for good, compared to just 50% from local independent retailers"
Perhaps so, but 100% of the goods bought in the supermarket end up in the local community and they do so at less expense than if they were bought in the high street. That is a good thing. Shoppers are part of the local community and the availability of cheap, high quality products is to their benefit. Money is merely a token with which people can buy the things they want. The availability of cheaper products has exactly the same positive effect as giving somebody more more money. It enriches all of us except the handful of people who are running moribund businesses.
Where the money ends up is immaterial. It is what we get for our money that matters. The whole point of trade is that money leaves the 'local economy' in exchange for the best products at the best prices. The market economy does not exist to serve the retailer. It exists to serve the consumer and, like all taxes, the Tesco Tax will ultimately be paid by consumers. They will be forced to pay higher prices in supermarkets in order to help shops charge higher prices in town centres. It is lunacy beyond belief.
And what is the justification for this looting? Essentially it boils down to a rose-tinted nostalgia for high street shopping by reactionaries, protectionists and the kind of people who insist that supermarkets are unpopular despite the fact that they are always full (due to our old friend 'false consciousness', no doubt). These are the people who hated Woolworths and HMV until the day they went bust, at which point they tearfully mourned the end of an era.
Let's face some facts about the high street. Internet shopping and supermarkets mean that the high street you grew up with is dead and it probably isn't coming back. If you can buy it cheaper online, there is no need to have a shop on the high street. The high street of the future will be dominated by businesses that sell services that cannot be bought virtually, such as hairdressers, and the leisure and entertainment industries. Get used to it.
In fact, prepare to enjoy it. Have you been to a high street recently? Aside from a few quaint market towns, British high street are awful. Not only are they awful, but they have been awful for decades. There is no reason to get misty-eyed about these concrete monstrosities and every reason to want them to die and be reborn.
We can have a flourishing high street of pubs, coffee shops, bookies, secondhand goods, specialist services and so on, but let's accept that the general high street retailer has had its day. Let's keep the fun stuff - the successful stuff; the stuff people actually want - in town and let's kick the boring shopping out of town. And if the new face of the high street means that some of the old shops will be turned into residential housing then all the better. The lack of housing is far more urgent problem than the sustainability of Dixons and WH Smith.