Scott Wright: Who should get millions paid back by profitable supermarkets?

A one-year freeze on business rates had been an important and timely break for retailers to help them negotiate the early days of lockdown, providing them with headroom to protect supply chains and ensure food, drink and other essential supplies could continue to reach worried citizens. It allowed firms to invest in personal protective equipment for staff, and to make adjustments to stores to allow people to shop safely.

With grocery retailers having long since accomplished that mission, and gone on to trade robustly throughout the pandemic, they are now in the welcome position of being able to hand the support back.

Calls for them to do so had been building for some time. Tesco, for one, had received criticism for paying £315 million in dividends to private investors while continuing to be supported by a hefty tax break.

However, its decision to pay back £585m of business rates relief to the UK Government and devolved administrations, which seemed from the outside to persuade its peers to follow suit, was the right thing to do (albeit the grocery giant said it spent more on Covid safety measures than it received in government support).

Of course, there are many businesses in other sectors and other parts of retail that have seen trade interrupted much more significantly than grocers. Indeed, there is surely a strong case for diverting the savings made from the actions of Tesco at el to more deserving causes. In retail alone, the coronavirus crisis has been a decisive factor as hundreds of thousands of jobs have been lost amid the closure of hundreds of stores and the collapse of big-name retailers into administration.

Ring-fencing at least some of the reclaimed business rates relief for a hardship fund for those who find themselves out of work would be a good use of public funds.

Firms that have been forced to suspend trading because of coronavirus restrictions should be supported more, too.

In Scotland, non-essential retailers currently in tier four and thus unable to trade have had to look on as major supermarkets have been allowed to continue, selling the kind of non-food items that are the stock in trade of many shuttered independents. To add insult to injury, the closure of many small shops has come at the worst possible moment, given how dependent some will be on the Christmas trading period.

While there are hopes that non-essential retail will be permitted to reopen in west and central Scotland from later this week – First Minister Nicola Sturgeon is due to announce changes to the tier system today – the loss of business will be hard to quantify.

The Scottish Government announced in November that it will provide £30m of grant funding for small businesses facing hardship to be distributed by local authorities, but there are concerns over how quickly it is getting into firms’ bank accounts. There are also fears the funding will not be enough: a struggling business is never going to reject a temporary closure grant of £2,000, but whether it is enough to guarantee their survival is another question.

In the current climate, there is no shortage of deserving causes. And the savings made from business rates relief would only go so far. But should the Scottish Government decide to redeploy any millions it receives in returned business rates relief, it must surely consider putting it the way of the hospitality industry.

The Scottish Hospitality Group declared yesterday that the support given to the industry north of the Border falls well short of what is being offered to businesses in other parts of the UK.

It claimed that, while Scottish hospitality firms will receive an average £64 of government support per week over the peak festive period, outlets in Wales will receive £269, and those in Northern Ireland £147.

Scottish ministers do deserve credit, though, for recognising the loss of trade at wholesalers to the hospitality trade, having unveiled a much-needed support package worth £5m on Friday.