Southwark Council's Cabinet has agreed to work towards introducing tax on large retailers to level the playing field for small traders following pressure from local Liberal Democrats.
A 'supermarket levy' has already been used to support small businesses in Northern Ireland, and Liberal Democrat councillors called on the council to introduce a Southwark-specific levy at council assembly last month.
Under the Liberal Democrat plan, the largest 10 supermarkets and retail outlets would be liable for the levy, which could raise over £1.1 million for the council. The money would then be put back into high streets and local services to support small businesses in the borough.
The proposal was voted down at Council Assembly, but after local campaigners returned to press the cabinet on the issue this week, the council has agreed to to write to London Mayor Boris Johnson about the issue and work with other boroughs to pursue the levy on a London-wide basis.
Southwark Liberal Democrats have welcomed the move - however have said they are concerned this will in effect mean the policy is "kicked into the long grass" and will never be implemented. They argue that the council should lead the way by taking action locally now rather than waiting for other councils to come on-board.
Chaucer ward councillor Cllr Tim McNally, who proposed the original motion, said:
"It's great news that the council is on board with the Liberal Democrat's proposal for a supermarket levy, but I'm disappointed that they're not getting on with the plans now.
"Agreeing to work with neighbouring authorities is a step in the right direction, but I am worried that in practice this will just mean a few letters are sent out by a cabinet member, who will quickly forget about the issue, thinking their work is done. Instead, real leadership is needed on this issue locally, which is why the Liberal Democrats continue to call for a Southwark levy while negotiations are made with other boroughs.
"Local Liberal Democrats and campaigners have shown that a local levy will have no effect on prices or discourage business activity in our borough, and the council needs to take action now. Labour should show they're on the side of small businesses rather than kicking this issue into the long grass."