Tesco store Perth UK

Several local councils in England have formally asked the government for new powers to tax large supermarkets.

According toBBC News, Derby City Council has called for the right to bring in a levy as a 'modest' effort to ensure supermarket spending 're-circulates' in local communities.

Some 19 other local authorities allegedly back the so-called 'Tesco tax' on big retailers, which it is believed could raise up to £400 million a year.

But despite a similar tax already operating in Northern Ireland and Scotland, the government has put on record its belief that additional taxes on supermarkets would push up food prices.

The council has made the suggestion under the Sustainable Communities Act, which allows communities and councils to put forward ideas to government to solve local problems.

In its submission, BBC News reports, Derby City Council claims that while supermarkets bring some benefits, they have an overall detrimental impact on the sustainability of local communities.

'Research has shown that 95 per cent of all the money spent in any large supermarket leaves the local economy for good, compared to just 50 per cent from local independent retailers; this levy is a modest attempt to ensure more of that money re-circulates within and continues to contribute to local jobs and local trade,' its report states.

The council reportedly wants the right to impose a levy on large supermarkets, retain the money raised, and use it to help small businesses, or to support community centres and parks.

The extra business rates levy, of up to 8.5 per cent, would affect any large retail outlet with a rateable value of more than £500,000.