the times | Thursday December 3 2020 2GM 43
Business
Ashley Armstrong Retail Editor
Alistair Osborne, Tom Ball
Tesco and Wm Morrison are to repay
more than £850 million of taxpayer
support amid fierce criticism of super-
market groups for benefiting from a
business rates holiday while enjoying a
surge in sales during the pandemic and
paying big dividends to shareholders.
Tesco, Britain’s biggest retailer, said
yesterday morning that it would hand
back its £585 million tax break to the
Treasury and devolved administra-
tions. Hours later Morrisons said that it
would repay its £274 million rates relief
in full.
It is understood that Tesco’s decision
led its rivals to reflect on their positions
and that board meetings to discuss the
issue were being hastily arranged.
The government announced a holi-
day on business rates for the retail
industry this year to help shops to sur-
vive the Covid-19 downturn. However,
the supermarket sector has emerged as
a lockdown winner, prompting MPs to
describe the windfalls for Tesco and
other supermarkets, worth £1.9 billion,
as an “absolute scandal”.
Tesco, which has kept trading
throughout the pandemic, enjoyed a
sales boom as people spent more on
groceries to eat at home, enabling it to
pay a £900 million dividend.
Its decision yesterday was a sharp
reversal from bosses’ former defiance.
John Allan, Tesco’s chairman, said two
months ago that he would “defend to
the death” the supermarket’s decision
to pay a dividend. Mr Allan, 71, said yes-
terday that the government should use
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Nov 4 12 20 30 Nov 3 11 19 30 Nov 4 12 20 30 Nov 4 12 20 30 Nov 4 12 20 30 Nov 4 12 20 3032,000
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26,000Lady Green, the former owner of the
collapsed Arcadia retail empire, has
brought forward a promised £50 mil-
lion payment to its embattled pension
scheme, pledging to hand over the cash
within ten days.
The Monaco-based Lady Green, wife
of Sir Philip Green, who ran Arcadia,
said that she would not wait until
September 2021, when the payment
Lady Green to put £50m into Arcadia pension scheme ‘within days’
Patrick Hosking Financial Editor was due. Her promise came as Edi
Truell, the City financier, revealed
that Pension Super Fund, his new
pension consolidation vehicle, was in
talks with Arcadia trustees to take on
the pension fund, which might reduce
the pension cuts faced by its 9,500
members.
In a statement issued on her behalf,
Lady Green said that she had paid two
instalments of £25 million each to the
scheme and had been due to pay
another £50 million next September.
“Lady Green is going to bring this pay-
ment forward to be paid in the next
seven to ten days to complete the
£100 million commitment of payment,”
it said.
There was no mention of whether
Lady Green regarded this as sufficient.
Nor did she mention the status of
£25 million of her personal property
that she also committed to the scheme
at the same time as the £100 millioncash promise as part of a restructuring
of Arcadia in June 2019.
Arcadia, which owns Topshop, Doro-
thy Perkins and Miss Selfridge, entered
administration on Monday, putting
13,000 jobs at risk. It paid Lady Green a
£1.2 billion dividend in 2005.
Despite the announcement, Stephen
Timms, chairman of the Commons
work and pensions committee said:
“The Green family may consider that
they have fulfilled their legal duties tothe members of Arcadia’s pension
schemes, but the extent of the moral
duty they owe those people will only
become clear once the funding levels of
the schemes have been fully assessed
by the Pension Protection Fund.”
Members of the main Arcadia
pension fund face reductions averaging
about 15 per cent in their total pension
promises if the fund is put into the pro-
tection fund, the industry lifeboat.
Pressure on prime minister, page 46Morrisons also vows to return taxpayer millions
Tesco to pay
back Covid
relief cash
the £585 million that the supermarket
was handing back to support struggling
businesses and communities.
He told The Times that the argument
for Tesco holding on to the money had
become “weaker and weaker”, prompt-
ing the board to consider paying it back.
“If you close your ears to what people
are saying and hunker down and never
be prepared, that’s not very wise,” Mr
Allan said. “We really didn’t know how
deep this crisis was going to be or how
much we were going to have to spend.
“Although we are not making out like
bandits, we will actually make less
profit this year than last year, we are
doing really well in comparison with a
lot of other businesses. There are many
businesses in far worse shape than us.
Our hope is that the government uses
the money to support businesses and
communities that need it more than
us.”
Morrisons said that it had been con-
sidering the debate around business
rates for some time and had planned to
make a decision once the full cost of the
pandemic was clearer. However, it had
been bounced into bringing the
decision forward by Tesco’s move.
It said that the cost of dealing with
the pandemic was £40 million higher
than it had anticipated initially because
of second lockdowns and other restric-
tions that have forced the closure of its
cafés.
However, it expected profits to be the
same as last year, prompting it to hand
investors a 4p-a-share special dividend
after deferring last year’s payment.
Morrisons said that it would not pay
Continued on page 45, col 3COSTFOTO/BARCROFT/GETTY IMAGESChinese companies sold goods worth £11 billion to Britain, with a big rise in textiles, such as masks for the health serviceChinese imports soar in pandemic
Philip Aldrick Economics EditorBritain imported more goods from
China than any other country at the
height of the epidemic, for the first time
on record.
One pound in every £7 of goods
bought by the UK came from China in
the second quarter. Chinese companies
sold goods worth £11 billion to Britain,
with a big jump in textiles, such as
medical masks for the NHS, and elec-
trical machinery, such as home com-
puters for remote working.
The figures hint at the reasons for
China’s remarkable rebound from the
pandemic. Forecasts on Tuesday from
the Organisation for Economic Co-op-
eration and Development showed the
world’s second largest economy
expanding this year by 1.8 per cent,compared with a 4.2 per cent decline
globally and an 11.2 per cent fall in the
UK.
China is usually Britain’s second
largest import partner, selling about
£45 billion of goods to Britain a year,
about £20 billion less than Germany.
However, its share rose in the second
quarter to account for 13.4 per cent of
British imports as purchases from
China increased and those from else-
where declined.
Exports of textile fabrics to the UK
jumped by £900 million to £1.16 billion
while exports of electrical machinery
leapt by £750 million to £3.87 billion.
The Office for National Statistics
said: “This was the first quarter that
China accounted for the largest pro-
portion of UK imports of goods.”
The ONS figures also show that theUK’s largest trade surplus was with the
United States in the first half of the year,
at £23 billion, which was driven by
£19.5 billion of net services exports to
America. President Trump’s White
House disapproved of countries oper-
ating a trade surplus.
UK exports of legal, accounting,
management consulting and public
relations services to the US increased
by 5.3 per cent between the first and
second quarters as trade in such UK
services proved to be “resilient” during
the crisis, the ONS said.
Ruth Gregory, at Capital Economics,
said: “Imports will get a lift from the
Covid restrictions. They are forcing
households to spend more on goods
than services. That supports consumer
imports, which is why China’s might be
so strong.”