Large retailers face growing calls to repay covid business rates relief payments
Large retailers that were allowed to stay open during the pandemic are facing calls to hand back hundreds of millions of pounds in business rates relief.
Wilko, Home Bargains and The Range — all privately owned by wealthy British families — were classed as “essential retailers”, giving them an advantage over shops forced to close.
The trio are in the spotlight after it emerged last week that B&M Bargains, their closest listed rival, had benefited from a doubling of profits as shoppers stocked up on garden furniture during lockdowns.
In December B&M handed back £80 million in rates relief, easing its path to pay bumper dividends. Listed retailers ranging from the supermarkets to Pets at Home have returned a total of £3 billion to the Treasury. Yet Home Bargains, owned by the billionaire Morris family, has kept an estimated £45 million of rates relief since the pandemic started and paid £15.8 million of dividends last year. The Liverpudians have an estimated £4.1 billion fortune and recorded £2.8 billion of sales and £262.8 million of pre-tax profits for the year to end of June 2020.
The Range, which made close to £1 billion in sales last year and is owned by Chris Dawson, a billionaire, also has kept its rates relief despite doing robust trade during the coronavirus outbreak.
Esther McVey, the Tory MP who led a campaign to put pressure on the supermarkets to return business rates relief last year, said: “The support from government for businesses was intended for those who needed it to get through the lockdowns. Those businesses who don’t need it or have thrived should not be holding on to that money and should return it.”
Sir Ed Davey, the Liberal Democrat leader, said: “There is a moral imperative for those businesses which have boomed during the pandemic to consider giving back their rates relief.”
Iceland, which is privately owned by the Walker family, the Co-op and Waitrose have refused to return rates relief despite being allowed to stay open during the pandemic.
Richard Pennycook, chairman of Howdens Joinery and a former chairman of the British Retail Consortium, said: “The grocery sector stepped up and fed the nation; public companies took the decision to return their rates and it feels like an example of corporate social responsibility at its best.”
A Range spokesman said that the rates holiday had given the business “confidence to invest in our stores and additional staff to ensure they were Covid-secure throughout the pandemic. The rates initiative has helped to offset the costs involved in achieving this.”
Wilko, which was entitled to rates relief, suffered a 7.7 per cent decline in sales because of reduced customer visits, while profits slipped to £5.48 million. It said that rates relief had “gone some way to offset the additional costs of enhanced safety measures to protect customers . . . Wilko repaid furlough support last year and argued that the high street continues to remain under pressure, which means we’re not in a position to pay back rates relief.”