SUPERMARKET giant Tesco is to hand back millions of pounds of government support, it has been announced.
The grocery chain's UK operation saved £585 million thanks to a business rates holiday introduced to help retailers during the pandemic.
Now it is to repay that sum, including around £60m to the Scottish Government.
Chairman John Allan said the Tesco board is "conscious of our responsibilities to society" and that the company did not need the saving due to remaining open and trading strongly throughout the pandemic.
The decision triggered calls for other supermarkets to do the same, with data from business rates specialists Altus Group showing "essential" retailers enjoyed savings of £3.03 billion.
There are also calls for the money to be handed to the pub sector, which is struggling hardest from the new restrictions.
Sainsbury's, Asda, Aldi, Lidl, Morrisons, Co-op, Waitrose, Iceland and B&M Bargains have been approached to ask if they would follow Tesco's lead.
Co-op said the amount spent on protecting staff and customers outweighed the savings. It added: "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."
The remaining retailers declined to comment. Shares in Sainsbury's, Morrisons and B&M all fell on Wednesday as investors expect pressure to increase on them to match Tesco's move.
Ex-Labour minister Andy Burnham, the Manchester mayor, tweeted: "This is the right move from Tesco.
"I call on other supermarket giants to follow suit."
And Scotland's Finance Secretary Kate Forbes urged other corporations to give back to the public purse: "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.
"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 £60m.
"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."
Data compiled last month for the PA news agency by real estate adviser Altus Group projected that the UK's four largest grocers - Tesco, Sainsbury's, Asda and Morrisons - and German rivals Aldi and Lidl would save around £1.87bn as a result of the rates holiday.
This was set to represent more than a sixth of the total £10.1bn rates bill which has been written off for all businesses during the year.
Bosses at Tesco said they will work with the Government on how best to hand over the money. It is understood this will be via HM Revenue and Customs.
Allan said: "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."
In October, Tesco revealed it made a pre-tax profit of £551m in the six months to August 29 - an almost 29% increase compared with the same period in 2019.
Sales during that period were up 0.7% to £28.7bn, with sales in the UK and Ireland up more than 8%.
Tesco chief executive Ken Murphy said the company spent £725m on improvements and safety measures - including increasing online sales.
He said: "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.
"Giving this money back to the public is absolutely the right thing to do by our customers, colleagues and all of our stakeholders."
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