Thursday 3 December 2020 / 12:07 PM Anneliese Dodds

Labour calls on government to ‘do the right thing’ with £1.3bn returned by supermarkets

Labour’s Shadow Chancellor, Anneliese Dodds, is today calling on the government to “do the right thing” and use the money that the UK’s largest supermarkets are returning to the exchequer to support businesses and individuals that desperately need help to get through the winter.

Sainsbury’s has today announced it will join Morrisons and Tesco in returning the money that they received when the UK government announced in March that all shops in England would be exempt from paying business rates this financial year. Taken together, this amounts to £1.29 billion being handed back to the Treasury.

Dodds says that this money is urgently needed by those businesses and individuals who have received inadequate government support so far and could struggle to survive the winter. Labour is calling on the government to “do the right thing” and:

Boost the support available for businesses in Tier 2 and 3 areas, such as in the hard-hit hospitality sector, ending the unfairness of the current system

Fix the gaping holes in the support for the self-employed, which has left many people excluded from any government support whatsoever

Throughout the crisis, Labour has consistently called on the government to be more targeted in its approach to business support, rather than taking a “one-size-fits-all” approach. In Labour-run Wales, the government chose to cap its rate relief package from the start, ensuring that the largest supermarkets continued to pay rates at a time when many were registering increased profits. The £100 million which this saved was used to start the Welsh government’s Economic Resilience Fund, securing more than 30,000 jobs which may otherwise have been lost.

In England, however, the UK government applied the business rates exemption to all retail businesses, missing the opportunity to target support to those who most need it. And ahead of the second national lockdown, the UK government gave a one-off payment of £20-a-head to every part of the country, irrespective of their level of restrictions or how long they have been subject to them. And for hospitality businesses, the UK government’s latest support package is less than half – and in most cases less than a third – of what was offered in the first lockdown. The Prime Minister’s announcement of a one-off payment of £1,000 for wet-led pubs in Tiers 2 and 3 doesn’t come near to making up the difference.

Anneliese Dodds said:

“It’s welcome that our largest supermarkets have done the decent thing and returned the money they gained from the UK government’s one-size-fits-all approach to rates relief.

“This should never have been necessary. If the UK government had done as Labour asked, and as we did in Wales, it could have targeted support to those who needed it right from the start and saved many more jobs.

“The UK government must now urgently do the right thing and use this money to fix the holes in its economic support schemes and end the unfairness in the current system.”