The comments, reported by the Mail on Sunday, came as it emerged that Tesco declared a £315m six-month dividend on Wednesday following a board meeting.
Tesco reported an increase annually in their dividend share from 2.65p in 2019 to 3.20p in 2020.
Critics say the dividend was effectively subsidised by hard-pressed taxpayers.
Allan claims the rates holiday was a ‘blanket decision’ and that Tesco had not accepted any further government assistance including the furlough scheme and VAT holidays.
Tesco sent home 26,000 vulnerable staff for a 12-week period and hired 47,000 temporary workers relating to a £533m cost.
Allan told The Mail on Sunday: “The operational changes cost around £725m profits were not dramatically up, increasing four percent to £1.2bn in the six months to the end of August.
“The company is solvent, cash-generating and lots of individuals are dependent on dividend payments – pensioners and small shareholders, which include a lot of Tesco staff.”
Labour MP and tax campaigner Dame Margaret Hodge, said: “Far too much taxpayers’ money has been given out in one form or another to businesses where the company, shareholders or the directors personally benefit at the expense of the public purse.”