Tesco boss: Cut rates to save thousands of high street jobs

THE boss of Britain’s biggest supermarket warned yesterday that hundreds of thousands of jobs will go unless ministers do more to help high street shops.

Tesco chief executive Dave Lewis called for business rates to be overhauled because they were unfair to firms that trade out of shops rather than those doing business online.

He said online retailers should face higher taxes to ‘level the playing field’ and warned that retail was at a ‘tipping point’, with job losses between 2017 and 2022 expected to hit 380,000.

The crisis has been highlighted by the Daily Mail’s Save Our High Streets campaign, which urges ministers to reform business rates so that shops and online rivals can do business on the same footing.

Mr Lewis, 53, said: ‘Retail in 2018 was brutal. Stores closed and businesses failed – 61,000 jobs were lost between March and September alone, followed by a disastrous November and then, for many, the worst Christmas in a decade.’

Critics say bricks and mortar shops are at a tax disadvantage while struggling with rising costs and tough competition from online giants.

For example, Amazon’s rates bill for its out-of-town warehouses is far smaller than some of Britain’s biggest high street names, even though its sales are higher.

Business rates have been partly blamed for the loss of 150,000 retail jobs last year, with up to another 175,000 predicted to go this year as more high street shops close their doors for the last time.

Firms were given some relief in the last budget, but business groups insist more needs to be done. Mr Lewis said ministers could help by easing the tax burden on shops and introducing a levy on internet sales to pay for the loss to the Treasury.

The business rates bill for Tesco, which has 3,400 stores in Britain and 300,000 staff, has doubled to around £700million each year in the past decade alone.

However, Mr Lewis said online rivals had not faced a similar tax rise, adding: ‘We need to rethink our business rates system.’

He told the British Chamber of Commerce conference in London: ‘Rates have become a rising tax on investment while profit taxes have fallen. It is a drag on growth and a drag on competitiveness.

‘There’s no longer a balance between taxation and sales.

‘As 20 per cent of sales have gone online, the burden on business rates has stayed and increased on a declining sales base.

That’s why I believe it is time to consider an online sales levy so that the burden of tax can follow the sales.’

A 2 per cent levy on online sales could raise £1.5billion a year, he claimed – enough to fund a 20 per cent cut in business rates for shops.

Mr Lewis said: ‘If the Government acts now, it could benefit millions of businesses across retail and the country, in the process saving thousands of jobs and preserving some of their social and economic value in our towns, villages and communities.

‘In this nation of shopkeepers, strong retail is important for a strong Britain.’

However, Tesco itself has been accused of damaging the high street by opening out-oftown superstores, luring shoppers from town centres.

Its critics coined the phrase ‘ Tesco towns’ to describe areas where the chain had become so powerful that it faced little competition.