Tesco building support for 2% levy on all retail sales

Tesco has been quietly building up support for its plans to overhaul business rates, with finance chief Alan Stewart writing a series of letters to the bosses of rival retailers.

The boss of the UK’s biggest supermarket, Dave Lewis, wants the Government to cut business rates by 20 per cent and make up the shortfall with a 2 per cent levy on all online retail sales.

Mr Stewart has written to rivals asking them to support the plans publicly, although not everyone is convinced. It is understood that at least three of the UK’s biggest supermarkets have been sent a letter, although other non-food retail chiefs have also received the note.

According to sources, Mr Lewis has been speaking to retailers at industry events to win over their support.

One source said: “Whenever Dave has received positive feedback, he is getting Alan to write a follow-up. Lots of retailers agree with him.”

Mr Lewis has attempted to lead the charge on business rates, following years of pressure and campaigning from the industry to overhaul the system, which charges rates on every commercial property in the country.

It comes as Tesco announced a round of 4,500 redundancies, several months after cutting a further 9,000 jobs - with business rates blamed in some quarters for the need to cut costs.

Retailers have complained that online rivals, including Amazon, Asos and Boohoo, are able to undercut the high street because the rates on rural warehouses are far lower than in town centres.

Rates are calculated based on the rental value of the property.

Co-op is one of the supermarkets which is supportive of Mr Lewis’s plans.

Chief executive Steve Murrells said: “There’s not a week goes by when another household name either announces it’s closing or markedly reducing its presence on the high street. There is clearly a reset occurring on the high street and, as has always been the case, businesses need to evolve in line with their customers and their customers’ needs.

“But there is a bigger picture here. Derelict and abandoned high streets doesn’t only tell a tale of lost jobs and reduced economic activity in our town and city centres.

“It tells a tale of spaces that were once positively used to connect people physically with their town and each other.”

Revo, the representative body for the UK retail property sector, published an open letter to Chancellor Sajid Javid last week calling for an urgent review of business rates.