Tesco, one of Britain’s big four grocers, has called for changes in the way business rates are calculated in Britain, saying the current system unfairly hits store groups and should be reformed to encourage investment.

The comments from Tesco Chief Executive Terry Leahy at retail property organisation BCSC’s annual conference add to the debate about how Britain’s tax system might be used to ease the pain of a looming recession.

Prime Minister Gordon Brown has called for coordinated fiscal action by the world’s leading industrialised countries to run alongside a series of coordinated moves on interest rates and on bank recapitalisation. Britain’s main opposition Conservative Party proposed tax cuts for employers who hire new workers.

UK business rates are linked to the value of the properties occupied by companies.

Leahy said property values were no longer a reasonable indicator of profitability and that retailers were particularly hard hit because they are highly dependent on property.

Leahy said: “The way businesses are assessed should be reformed to ensure a fairer spread of tax liability across business sectors. A new system should reflect today’s priorities for society. For example there should be business rate relief for investment in deprived communities, energy efficiency measures and green technologies.”