Spotlight on issue of repaying government business rates support

Two North West groups are in the spotlight today regarding repayment of business rates relief, for different reasons.

Cheshire-based pet care group Pets at Home has announced it will repay in full the £28.9m of business rates relief received across the business during the COVID-19 pandemic.

However, there is internal turmoil at the Manchester-based Co-op Group over the issue, according to Sky News.

Pets at Home said its decision reflects the company’s guiding principle of treating all stakeholders fairly and is supported by the continuing strong performance of the business.

Group chief executive, Peter Pritchard, said: “We were very grateful for the rates relief provided back in March during a time of significant uncertainty, which helped us to take the decision to keep our stores, online operations and veterinary practices open.

“Recent positive news around the launch of vaccinations for COVID-19 has led us to reassess the level of uncertainty ahead.

“Pets at Home is a robust business, both operationally and financially, with amazing colleagues, great operations, good liquidity and a strong balance sheet. Our decision today demonstrates our clear commitment to acting responsibly and treating all of our stakeholders fairly.”

Meanwhile, Sky News reports that some of the Co-op’s National Members Council are pushing for the group to waive the Government’s £70m of aid.

It coincides with news of other major retailers, such as Tesco, Sainsbury’s, Asda and Aldi handing back a combineed total of £1.7bn of business rates relief.

There are concerns over the Co-op’s image should it fail to follow suit, having this week received £185m from the protracted sale of its insurance underwriting business, and comments on an internal forum about the group’s £100m investment, over a 15-year period, in the Manchester Arena next to its headquarters.

A Co-op spokesperson said: “The Co-op response to helping to feed and care for the nation during COVID has been outstanding, and we are immensely proud of what our colleagues have achieved.

“We’ve clearly put the interests of people before profits and the extra costs for keeping our colleagues and customers safe have far outweighed the Government support we’ve received, in respect of business rates and furlough payments.

“Given the huge uncertainty we’re facing into still and the ongoing costs we are incurring, we’ll consider our approach in terms of the Government support we’ve received at year-end.”

And following the decision by a number of major retailers to return their business rates relief to the Treasury, Mayor of Manchester City Region, Andy Burnham, and Mayor of Liverpool City Region, Steve Rotheram, have written to the Chancellor urging him to use the funds to help those who urgently need financial support.

The chairman of Tesco, John Allan, has also called for this, saying: “We hope this will enable additional support to those businesses and communities who need it.”

While the Government has taken unprecedented action to support individuals and businesses throughout the pandemic, there are around three million people still excluded from meaningful financial support.

This includes the newly self-employed, new starters denied furlough, PAYE freelancers, and directors of small companies.

There is also a concern that many hospitality businesses in Tier Two and Three areas have not been given sufficient funding to survive the loss of the profitable time of the year.

Mayor Steve Rotheram said: “We know the COVID pandemic has created an unprecedented situation and everyone is doing what they can to support those who need the most help. Sadly, we’ve seen millions of people left out from meaningful government support who have been in desperate need since the first lockdown in March.

“Myself and other Metro Mayors from all across England have been listening to those who have been left behind including over 600 people from the ExcludedUK and ForgottenLtd groups. It’s been heart breaking hearing the toll the lack of financial support has had on them, their mental health, on their families and on their business and their ability to keep on staff. We can’t just walk on by and abandon them. It’s immoral.”

Mayor Andy Burnham said: “These forgotten freelancers and contractors are entrepreneurs who form the backbone of our local economy. They pay their taxes but have been left with little or no government support.

“That is a massive injustice. If the Chancellor fails to fix this, the Government will be sending out a very dangerous, anti-entrepreneurial message that it is too risky to strike out on your own and set up your own business.

“They are also risking levelling down some of the poorest parts of the country. Wet-led pubs are at the heart of communities across the North and will not be saved by what’s currently on offer from the Government. The latest offer of £1,000 might buy a beer keg or two but it won’t keep them afloat until March.

“With this new windfall, the Chancellor has a golden opportunity to bring in from the cold those who have been left out. We are urging him to take it.”