Tesco and the Art of Buck Passing

One of the culprits of the last property boom/bust was the Tesco supermarket chain. So far, it has escaped Scot free from public censure for its role in the financial disaster that continues to blight the UK and global economy to this day.

For years, Tesco systematically cornered the prime locations in localities where it wanted to operate: it functioned not as a retailer, but as a classic land speculator.

It built up its land bank, helping to curb cost-cutting competition from High Street retailers and other supermarket chains, and pocketing the capital gains as land prices soared.

It expanded overseas, East and West, as if there was no limit to its operations.

Then, when the property market became insupportable, the financial system – which connived with speculators like Tesco – imploded. Many enterprises fell victim to the errors of others, and their employees paid the price: losing their jobs. Millions of families across Europe and North America had their homes repossessed.

Tesco retrenched. Recently, it began selling off chunks of its real estate. And now its new boss, Dave Lewis, wants the taxpayer to carry the can for its strategic errors.

Lewis says that business rates – the local tax on commercial property – are too burdensome. He wants to talk to government about cutting that burden, he told the CBI conference on November 9.

Lewis wants to shift the costs of the public services which Tesco needs to use, onto the shoulders of other taxpayers.

“Over the last five years property values have fallen and profits are down,” he bleats, “but business rates have risen quietly but dramatically.”

Well, Tesco made a major contribution to pushing up those property values. And it did not complain, as it marked up the rising value of its land on its books. But now, as the welfare costs have soared as a direct result of the disaster caused by property speculators, someone has to pick up the bill.

Why push those costs onto the innocent victims?

Why not place the costs on those who, like Tesco and the bankers, connived to create the chaos in the first place?

4 Responses to Tesco and the Art of Buck Passing

  1. Charlie 11 November 2015 at 12:34 pm #

    Hi Fred.. Will your book As Evil Does be published as ebook?

    • Fred Harrison 13 November 2015 at 10:31 am #

      Yes, Charlie, there will be an e-version of As Evil Does; but right now I am scrambling to start writing Vol. 2 of the Handbook on Humanity trilogy! Thank you for inquiring – it prompts me to get the arrangements in hand.

  2. Alan Longbon 13 November 2015 at 4:30 am #

    Hello,

    I too would buy a copy of your latest book right now if it were available as an eBook.

    The same goes for all your books and essays. The older ones such as Power in the Land I would buy again in eBook form, just to be able to have them on my tablet and available for reference quickly and easily wherever I was in the world.

    I am sure that many people would feel the same and it would be a great way of making well deserved double earner on past work and also spreading the word more widely.

    Thanks

    Alan

  3. Eli 22 November 2015 at 2:34 am #

    Hi Fred,

    Having read a few of your excellent books, can you please give me your view of an alternative school of thought, currently attracting attention as the “Positive Money” campaign, although other thinkers such as Peter Schiff in the USA are saying the same thing.

    They believe that high land prices are a result of QE/Money Supply expansion that has occurred on a massive scale since we left the gold peg in 1971. As money loses value, land is used as a store of value in place of money.

    Their views are backed up by the Austrian School of Economics. So they are campaigning to prevent banks from “creating money out of thin air.” I have looked at some statistics and it seems that house price rises had a huge acceleration in the rate of increase since 1971, which does seem to support their view.

    So if Money Printing were the root cause, wouldn’t a Land Value Tax just make land less attractive as a store of value relative to other assets. In turn, the problem of rising prices and bubbles would move to some other asset, such as Gold or company shares? That being the case, returning to a currency based upon a Gold standard with no room for monetary expansion would be a more effective cure for the boom bust cycle than an LVT.

    It would be a great help if I could get your response to this question.

    Many thanks.

    Kind regards,

    Eli

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