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Suffolk: Revealed - Tesco business rates slashed to counter opening of new Sainsbury’s store in Sudbury

12:11 02 October 2014

Ian Berry is calling for a change to the business rates system.

Ian Berry is calling for a change to the business rates system.

Archant

A major row erupted last night after it emerged that Tesco received a £118,000 cut in its business rates when a rival supermarket opened nearby in a west Suffolk town.

EADT NEWS WEST - WILL CLARKE

Chris and Patrick Weston from Twinstead near Sudbury outside Tesco's in Sudbury protesting about the way their Dog  Fred has been treated by Tesco Insurance.

Photograph Tudor Morgan-Owen 02/06/08
EADT NEWS WEST - WILL CLARKE Chris and Patrick Weston from Twinstead near Sudbury outside Tesco's in Sudbury protesting about the way their Dog Fred has been treated by Tesco Insurance. Photograph Tudor Morgan-Owen 02/06/08

Retailers in many of the county’s towns have long campaigned for drastic amendments to the system, which they say is “inequitable” and needs to change to protect smaller, independent traders.

The Government’s Valuation Office Agency (VOA) assesses rateable values for out-of-town supermarkets and DIY stores under a different system to town centre shops.

And now official VOA figures, accessed via the agency’s website, show the rateable value of Sudbury’s out-of-town Tesco has been reduced by more than 7% as a result of Sainsbury’s opening a new store two miles away.

Last night, a Tesco spokesman declined to comment on the figures, which he said were set by the Valuation Office.

Ian Berry is calling for a change to the business rates system.Ian Berry is calling for a change to the business rates system.

But Ian Berry, who has helped to run Kestrel Bookshop in Sudbury’s Friars Street for many years and has been lobbying MPs about the rates issue since 2009, said the Tesco case proved that town centres were “subsidising the out of town giants”.

He said: “The 7% reduction in Tesco’s rates amounts to £118,617 and this figure alone is about nine times our shop rates for a secondary position in town.

“To base the cut on competition from Sainsbury’s is ludicrous as we are all in competition with the supermarkets these days because they sell almost everything.

“Perhaps now all of us in Sudbury town centre, only about half a mile from Sainsburys, will be able to claim at the least a 30% reduction in our business rates if we consider the supermarket to be in direct competition with us. That, of course, will apply to just about every shop in the town.”

Mr Berry said he feared that if Tesco could secure a reduction based on competition, it could set a precedent for other supermarkets.

He has written to Colchester MP Bob Russell about business rates, who raised the issue in Parliament.

Another Sudbury retailer, David Holland, said the Government’s focus appeared to be on “doing what is right for the big players”.

He added: “They have taken their eye off the town centre retailers and the economy of local towns.”

Champion of local food, Lady Caroline Cranbrook, described the inequity of the system as “shocking”. She said: “Business rates are high enough as it is for businesses in small towns so anything that disadvantages them further is not going to encourage a greater diversity of businesses.

“The system is obviously inequitable and needs to be urgently addressed.”

John Dugmore, CEO of Suffolk Chamber of Commerce, said: “One of the many important issues firms across Suffolk raise year on year is the pressing need to address business rates.

“We are seeing increased growth in our local economy which is due to the hard work and entrepreneurial spirit of local businesses. This must not be put at risk and as a Chamber we have continued to lobby and campaign for an overhaul of business rates.”

“With a General Election just around the corner we’ll be working with business big and small to ensure important issues to commerce, such as business rates, are raised with our representatives in Parliament.”

Graeme Willis, from the Campaign to Protect Rural England (CPRE), said: “National planning policy is geared to making sure that growth is in town centres, to support thriving town centres, so it is perverse that the rates system works in reverse to the planning system by benefiting the out of town retailers.”

“Aside from the changes in shopping behaviour, the main threats to small shops come from the supermarkets and rising rents. There is also evidence to show that they are further disadvantaged by the workings of the valuation process and, as a result, pay far higher business rates per square metre than supermarkets.”

A spokesman for the VOA declined to comment.

7 comments

  • amsterdam81 want to stand behind the counter like I do for 60 hours a week to read that this top retailer is getting all this rebate just because sainsburys has opened up 2 miles away. the small retailers have had to put up with competition for years and we have had no rebate.

    Report this comment

    bobby

    Saturday, October 4, 2014

  • My only interest in shops is as a customer. Stories like this should be objective and I was just pointing out that the big stores seemed to be paying pro rated similar amounts to everyone else. If charity shops didn't exist there would be even more empty shops on the high street. The real villain for high St shops is greedy landlords. Lower rents rather than rates are the solution.

    Report this comment

    amsterdam81

    Friday, October 3, 2014

  • I wonder if the other supermarkets in Sudbury (Waitrose, The Coop and Aldi to name but 3) likewise sought and got a rate reduction?

    Report this comment

    clive coleman

    Thursday, October 2, 2014

  • The easiest way to reduce Town Centre business rates is for Charity shops to pay a fairer share. Currently they typically pay only 20% of the full business rates. Increase that to 80% Should charity shops be allowed to employ unpaid staff. Maybe they should have to pay 80% of minimum pay. These charity shops are competing with real businesses with real overheads. It is currently very unfair competition

    Report this comment

    BobE

    Thursday, October 2, 2014

  • So while independent shops, the heart of our town centres, continue to be caned by business rates, their out of town competitors get a discount? Where's the sense in it. Complacent people like Amsterdam81 might be happy to see their town centres boarded up or filled with betting shops and charity outlets - but not everyone is. If anyoneneeds subsidising it is small independents not the accounts fiddling, horse meat traders like Tesco.

    Report this comment

    Norfolkngood

    Thursday, October 2, 2014

  • The article is a mess guys, it's a jumble of poorly-written statements and quotes by people who took the time but haven't been given the credit, David Holland and Lady Cranbrook for example, who's businesses they represent should be listed. Photo two and caption is for a different story, and rwo similar photos used for Ian Berry where a of the new Sainsbury's hasn't been included.

    Report this comment

    Ipswichite

    Thursday, October 2, 2014

  • So Tesco are still paying more than £1.5M a year in rates. While every little helps the reduction is not too significant. The people complaining only seem to be paying £1000 a month, less than 1% of Tesco's amount.

    Report this comment

    amsterdam81

    Thursday, October 2, 2014

The views expressed in the above comments do not necessarily reflect the views of this site

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