Big supermarket chains were reaping the rewards of Government help “when they didn’t need it”, the former chief executive of Wickes and Iceland said.
Retail expert Bill Grimsey urged Chancellor Rishi Sunak to consider what sectors are benefiting from the business rate holiday, after he claimed there was “no way in the world” that money spent on the likes of Tesco and Sainsbury’s was being spent well.
In March the Chancellor announced all retail and hospitality firms regardless of size are exempt from paying business rates for 12 months in a bid to combat the financial damage caused by the pandemic.
Speaking at the Housing, Communities and Local Government committee meeting on Monday, Mr Grimsey said there needs to be a targeted approach to ensure smaller businesses are getting the financial help they need.
He said: “Why give Tesco, Sainsbury’s, Morrisons and Asda a business rate holiday which amounts to over a billion or probably two billion – it’s £700 million just for Tesco – when they didn’t need it?
“And they definitely have had a great time during this period because volumes have gone up.
“And there’s no way in the world that that money’s been well spent whereas it could have been spent on supporting smaller businesses that need it.
“I think you need a targeted approach to this assistance and not the approach that we’ve had, the blanket approach.
“I urge the Chancellor to look at the sectors that need the help and the small businesses particularly that need that help.”
He claimed Sainsbury’s stands to make £26 million after it hands money from the Government’s furlough scheme to every eligible employee, which he described as “crazy”.
Mr Grimsey said he was not “anti-the big four”, stating they did a “splendid job” but that they “don’t need the help they were provided with”.
When asked whether he supported the notion of an online sales tax, Mr Grimsey responded: “There’s absolutely no way the Government should interfere with markets by introducing a tax to penalise one route to market just because it happens to be more successful than the other.”
He suggested the “archaic” business rate should be abolished and replaced with a “sales tax” of 2% on retail sales in the country, which he claimed would produce “exactly the same amount of money that’s produced by business rates on the retail sector”.
“That would level the playing field overnight,” he added.
He also criticised online giant Amazon for not paying its fair share of tax, as he accused it of being allowed to “get through the back door”.
He said Amazon will continue to grow in the upcoming second national lockdown for England, adding: “Black Friday (November 27) has come at a great time for online retailers.
“This lockdown is playing right into their hands, they’re going to have a bumper time … and the bricks and mortar retailers are not going to participate in that.”
Fellow panellist Dominic Curran, property adviser at trade association British Retail Consortium (BRC), said he did not support the idea of an online sales tax, stating eight out of the top 10 biggest online retailers are high street names.
He said: “What we’ve seen is all of them have increased the proportion of sales that they do online to the point where I think John Lewis are now over 50% of all of their sales online.
“Apart from catching international tech companies, it would actually capture those companies that probably in terms of retail needs support rather than further taxation and penalisation.”
Michael Wheeler, political officer at the Union of Shop, Distributive and Allied Workers (Usdaw), and Robin Osterley, chief executive of Charity Retail Association, said they would support the tax on the condition that business rates are reformed.
Mr Wheeler told the meeting: “We don’t want to see an online sales tax brought in as a stand alone measure, as an extra level of taxation. But we do see it as part of a system that would level that playing field between bricks and mortar and online.”
Mr Osterley added: “It has to be really carefully thought through.
“It’s very possible that it would catch the kind of people who are always put up as the evil people in these environments, such as Amazon, but of course a lot of our members operate online as well.”
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