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?