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Will Over £1 Billion in Coronavirus Repayments From Supermarkets Become Cash Injection for Hospitality?

Morrisons, Aldi, and Sainsbury’s joined Tesco in repaying business rates relief

Chancellor Rishi Sunak holds a syringe at a clinic research facility in Hammersmith Hospital. London — he wears a mask
Is a cash injection on its way for a beleaguered industry?
Jack Hill/WPA Pool/Getty Images

U.K. supermarkets are paying back hundreds of millions in coronavirus grants, and hospitality needs help

Morrisons, Sainsbury’s, and Aldi have joined Tesco in paying back hundreds of millions of pounds in coronavirus business rate relief. After the latter announced it would pay back £585 million, Morrisons followed suit with £274 million; Sainsbury’s joined the PR party with £440 million, and Aldi came in with over £100 million. All of the supermarkets cited similar reasoning: that they had been open and trading during lockdowns, and thus hoped the money could be used for businesses that had been forced to close or had trade seriously hampered. Marks and Spencer, Waitrose, and Co-Op have said they will not be able to pay back the relief.

That leaves the government with around £1.4 billion it didn’t expect to have. Yesterday, 2 December, restaurant trade body U.K. Hospitality actively suggested that Tesco’s £585 million might become a “Hospitality and Tourism Recovery Fund.” It is yet to reinforce this claim for the newly returned funds, but it increasingly feels like the government has an opportunity to make a decisive statement on rent for restaurants, pubs, and bars — their largest fixed cost and the bill that existentially threatens hundreds of thousands of businesses.

Currently, the lease forfeiture moratorium that protects these businesses from evictions expires at the start of 2021. It’s widely expected that the government’s initial plan will be to extend it, possibly into summer, in accordance of predicted vaccine timelines. But that would not solve back rent: the debt accumulated by businesses over the last nine months, nine months in which, for many, revenues have been near wiped out. Grants — taken from this fund or not — would solve this problem, for both restaurants and landlords, and would also represent the government taking a proactive step against a backdrop of reactive, inadequate policymaking.

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