Every little helps…

I DOUBT if our Sammy has been down at Writer’s Square lately, or whether he’s been flicking through the pages of Tescopoly – but there’s little doubt he has managed to piss off one multi-national more than our tent-dwelling comrades have. And after reading Tesco director David North’s threats the other day about cutting job creation and investment here if Sammy goes ahead with plans to impose a large retailer levy, I rather sympathise with Sammy.

North said last week that Tesco’s plans to put £100m into the local economy and create 1,500 jobs here over the next three years could be jeopardised by Wilson’s proposal. He added:

There is a belief that this tax will raise revenue without any disadvantages to the economy, but it will deter investment into Northern Ireland.

We operate internationally – I think that’s why the administration think it’s a good idea to introduce this levy – but where capital is constrained, investment is going to go where we have more confidence in the return. There are plenty of administrations across Europe trying to attract investment and over time it is not going to flow to those areas which are saying we’re going to tax you until you squeal.

But the trouble with Tesco jobs, is that their creation is often at the expense of other jobs. It has been argued that it’s as much about job displacement, as it is about creation. Tesco tends to undercut smaller retailers, who close, and suddenly Tesco can charges what it likes. This is anti-competitive. And those unemployed till workers will need to work somewhere, perhaps for less than before.

There are also questions about how much of Tesco’s ‘investment’ actually gets recycled back into the local economy, and how much gets sucked out immediately.

Sammy put up a typically rambunctious defence to North’s comments in the Assembly yesterday, which can also be watched here (about 31 minutes in).

Anyone who tells me that a £100 million investment project for which Tesco will look for a return over the next 20 to 25 years will be derailed by a temporary tax that relates to four stores and amounts to £840,000, at the most, spread over the 20- or 25-year term of that £100 million investment project, and that that kind of investment will be endangered, either has not done their sums very well or must think that we are all a bunch of idiots. That is equivalent to a 0·042% return over the 20-year period.

Now, if Tesco’s investment in Northern Ireland is that perilous and precarious, I do not think that it is a wise investment decision and it should, probably, never have been made in the first place. For that reason, I believe that it is bluffing and bullying. It will not get away with that.

Now, most people will know that I’m not the world’s biggest DUP fan, but it is heartening to hear a local minister highlight Tesco’s pure greed while sticking up for the smaller businesses that are so important to Northern Ireland’s economy.

I have no problem with Tesco being here per se. But I do have a problem with companies that believe they have a God-given right to preferential treatment and can bend politicians to their every whim.

I think there are real questions over the real value of Tesco to Northern Ireland’s economy, so if Sammy is prepared to level the playing field a little, fair play to him. Tesco has no votes, but small retailers do, and I’d imagine this will go down well. Other authorities can play a part. Perhaps councils also need to look at district rates; perhaps Land & Property Services should ensure it bothers to collect the rates from those larger companies which seem to escape its attention for some reason.

I rather suspect we’d rather have thriving town centres than the rows of boarded-up shop fronts that seem to be growing in number here. What Wilson is asking Tesco and others to accept is paltry, and if it helps stop any more tumbleweed blowing through our town centres, surely it will be worth it?

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  • jthree

    It took Asda just a little less than three years to stamp out a 40 yr old business in Ballyclare

    http://www.bbc.co.uk/news/uk-northern-ireland-15392677

    And is it just me or does the Bel Tel always give a credulous hearing to a rich man with a sob story? It’s almost as if they suspect Gavin O’Reilly might occasionally have a look at the paper.

  • Tescos and the incoming bigstores did help spread good fair employment practices

  • The Raven

    Articles. Their arrival en masse was around 1994/5, wasn’t it? Do you have figures to support this? I am genuinely interested. In terms of the main topic, there’s more to the proposals than just the Tesco Tax.

    Let’s be sure that the Austins and Logans don’t get caught in the net with the Debenhams or Frasers of this world.

    Let’s make this ten years and actually show a bit of ballsy support for independents, rather than the usual wishy-washy three year programme.

    Let’s NOT give rates relief to those with empty properties who bought in boom, and fully expected to charge high rents but now can’t afford to do anything with the subsequent derelict properties. I’d argue that they should be shown no quarter.

    There are also wider issues about rate relief – I firmly believe in an incremental increase for those who are starting out. Civil servants hate the thought. Too much like hard work.

    But while rates is a regular “harrumph” issue on here for an uninformed few, there’s a bit of work which needs to be done on the rent issue. Rents for the one-man-band retailer in this country are exhorbitant in some places. I’d encourage anyone to ask around in their local town to see for themselves. If you *really* want interesting ownership issues verses dereliction, I’m sure Nevin could regale us about Bushmills…

    Finally I think there’s a little of realism needed here for everyone. Gonzo writes: “if it helps stop any more tumbleweed blowing through our town centres, surely it will be worth it?” The small town centre, as we know it now, will ultimately be dead in a generation.

    Your wife may still enjoy a stroll through the shops with your credit card; but your teenage daughter is hanging out in Starbucks, window-shopping with her mates for ideas, and immediately heading home to get it cheaper on the internet, before bragging about it on Facebook. Me? The only thing I will buy from an honest-to-God shop are *some* items of clothes and fresh food (I’m fussy and not a fan of chemicals.)

    New ideas are needed on how we use space; some thinking on what makes a town centre; how we can persuade landlords to think creatively about space, and what they really *should* be charging as opposed to what they think they can charge; who should be occupying these spaces…and so on. This rates paper should be starting a debate. It doesn’t, other than to allow Showboat Shammy to do a bit of blustering.

    There are still a few interesting independents out there – huzzah for No Alibis and others – but they’re a declining breed. The internet is a foreign concept to our remaining independent retailers, notwithstanding a select few who have run with it.

  • Nunoftheabove

    What will £840,000, at the most, spread over the 20- or 25-year term secure the taxpayers of the north exactly ? Can Wilson also assure us that this won’t simply drop off – be sliced off, more like – the block grant/subvention and/or be wasted by Stormont in any event ?

    If, as seems likely, there would be an impact on local economies of large retailers like these boyos investing in terms of local jobs, shop-keepers and suppliers and of course on customers, why does Wilson give the impression of being someone who has no idea what the type and scale of that impact would be ?

  • Comrade Stalin

    The people who run Tesco have a responsibility to their shareholders to maximise profits, so it should be expected that they will whinge any time they are facing a tax increase – if they didn’t they’d not be doing their job. It’s right that our politicians should weigh up both sides and make their decision, which I’m quite sure Sammy and his department have done in this case.

    I have a mixed view on Tesco. We are better off without Stewarts, Crazy Prices and so on. With the possible exception of Curley’s up in W Belfast, these guys ripped off the people of this country for decades, and provided poor service and poor choice in dirty, unmodernized shops with shoddy employment practices. Initially, they modernized with the plan to take on the big multiples – it seems like so long ago when they put out the statements “we survived 25 years of terrorism, we will survive Tesco and Sainsbury”!) but within months they succumbed and were taken over. A damn good thing too.

    I’m not that crazy about the way Tesco and so on cause damage to town centres, and I would like to see more done to support smaller businesses; in particular we need to support our pharmacists who provide an invaluable service complementary to the NHS. Nonetheless, the cheaper goods and food are a lifeline for families on lower incomes.

  • Nunoftheabove

    Comrade Stalin

    Where’s the evidence that they’ve weighed up both sides in this case please ? Why the complete absence of doubt on your part that they’ve done anything of the sort in an efficient and effective manner on behalf of the taxpayer ?

  • Hello Raven

    No figures at all, just received wisdom which I’ve never challenged critically.Thinking about it I could make a case for it but not a statistically informed one.

  • Comrade Stalin

    Nun,

    Straw man city there.

  • Heard of centre-periphery exploitation? It is the process by which money gets taken out of circulation in the local economy and sent to the capital city. It is commonly found in the Third World, but also happens in rural areas of the British Isles. A lot of private money heads for London (or Dublin) and a small bit of public money comes back.

    Now Sammy Wilson cannot attack that directly, but he is permitted to set taxes to support small companies at the expense of large ones.

    Now if only something could be done about the higher taxes businesses pay as protection money to criminal gangs and paramilitaries. Who is up for producing a map of protection money rates across Northern Ireland?

  • RyanAdams

    Wilson should call the bluff.

    I’m sure Asda and the likes would be more than happy to continue expanding here unchallenged if Tesco decides to throw a temper tantrum.

  • Every Lidl helps

  • Nunoftheabove

    Comrade Stalin

    Re. your apparent decision to shut up rather than put up.

    Duly noted.

  • iluvni

    So, thats why Sammy Wilson wasnt available to vote in the Commons on Tuesday….he was doing his other full-time job.