£60m for Holyrood
Tesco to repay £585m business rates relief
The supermarket chain said it was ‘immensely grateful’
Tesco is to repay the UK Government and the devolved administrations the £585m of business rates relief received in respect of the COVID-19 pandemic.
It is likely to mean a £60m repayment to the Scottish government.
Scotland’s Finance Secretary Kate Forbes said: “We will ensure this money is fully spent on those who have been hardest hit during Scotland’s recovery from Covid.”
In a statement, Tesco said: “We are immensely grateful for the financial and policy support provided to us by the governments of the UK. This was a game-changer and allowed us to ensure customers got access to the essentials they needed.”
“The decision at the time to provide rates relief to all retailers was hugely important. These funds meant that we had the immediate confidence, in the face of significant uncertainty, to invest in colleagues, and support our customers and suppliers. We are immensely proud of our colleagues for their remarkable efforts during Covid.
“Every penny of the rates relief we have received has been spent on our response to the pandemic. Our latest estimate at our Interim Results in October was that Covid would cost Tesco c.£725m this year – well in excess of the £585m rates relief received.
“Ten months into the pandemic, our business has proven resilient in the most challenging of circumstances.
“We are therefore announcing that we will return to the public the business rates relief received in full. We will work with the UK Government and Devolved Administrations on the best means of doing that.”
Ken Murphy, group chief executive: “While business rates relief was a critical support at a time of significant uncertainty, some of the potential risks we faced are now behind us.”
John Allan, chairman, added: “The board has agreed unanimously that we should repay the rates relief we have received. We are financially strong enough to be able to return this to the public, and we are conscious of our responsibilities to society.
“We firmly believe now that this is the right thing to do, and we hope this will enable additional support to those businesses and communities who need it.”
The cash impact of the repayment of £(585)m is split c.£(535)m in this financial year and c.£(50)m in the 2021/22 financial year.
Morrison’s later announced it would repay £230m. Sainsbury’s is understood to have received £498m and Asda £297m.
Reacting to Tesco’s decision, Scotland’s Finance Secretary Kate Forbes said: “This is a public spirited announcement from Tesco who, along with other essential retailers, have played an important role in Scotland’s response to the pandemic. I thank them for it.
Kate Forbes: every penny will be used to support Scotland’s hardest hit businesses (pic: Terry Murden)
“At the beginning of the pandemic the effects on businesses were uncertain and Tesco acknowledge that the rates relief provided by the Scottish Government gave them the confidence to retain staff and ensure essential supplies were available to customers.
“Now the situation has evolved, and Tesco’s business is proving to be resilient, I am pleased that the company are willing and able to refund the public support provided, which we estimate to be in the region of £60 million.
“We will ensure this money is fully spent on those who have been hardest hit during Scotland’s recovery from Covid. If other businesses find themselves in the same position, I can assure them that every penny of support returned will be reinvested in supporting Scotland’s hardest hit businesses, alongside investment in our communities and our economy.”
Brewers ask for Tesco money
Brewers and pubs are calling on the Chancellor to give them a share of the money that Tesco is handing back to the Treasury.
The Society of Independent Brewers (SIBA) says the repayment would be worth £14,000 to each of the UK’s 40,000 pubs and 2,000 breweries and could offset losses during the restrictions.
They say it would an improvement on the £1,000 grant offered to so-called wet pubs which has been described as “derisory”.