UK retailers are being “raided like a piggy bank” according to the boss of Marks and Spencer, as he called on the government to take four key approaches to help businesses survive.
Writing in the Sunday Times, Stuart Machin laid out the difficulties being faced by retailers following Rachel Reeves’s Budget as he warned that the government’s plans would ensure that “UK retail will get smaller.”
One of Labour’s key pledges throughout the election campaign was to drive growth in the UK economy but the Chancellor’s Budget was largely criticised as being “anti-business” due to the increased cost to things such as National Insurance contributions and the national living wage.
The retail boss slammed Budget announcements and other policy decisions as he pulled no punches on his prognosis for the future of retail and the economy more generally.
He wrote: “Five years on and the Brexit bureaucracy continues… It is painful for us and I know that it is crippling for smaller businesses.
“This depressing prognosis is compounded by some ill-thought-through decision-making.
“The Employment Rights Bill means we would have to say no to a colleague usually working weekend hours who requests more shifts, and the change to the National Insurance Contributions (NICs) threshold will hit part-time workers hardest.
“The nonsensical Deposit Return Scheme is slated to go ahead in 2027 despite it collapsing in Scotland and Wales pulling out.”
Last year, Marks and Spencer’s profits rose to £672m for the 12 months to March but despite this growth, Mr Machin acknowledges that many others are experiencing decline whilst operating in a difficult economic environment.
Last week the Bank of England slashed the country’s forecast growth rate this year with Labour now on course to see a meagre 0.75% expansion of the economy in 2025.
Mr Machin added: “Measures announced in October budget are contributing to the anaemia behind lower growth forecasts.”
The M&S boss has called on the Chancellor to make four changes to her plans to drive economic growth. Firstly, he urged the rise in national insurance contributions to be phased over two years to allow business the chance to adjust to and plan for the changes.
He further urged Reeves to delay an increase in Extended producer responsibility (EPR) fees which will leave retailers with a significantly increased tax increase as well as suggesting that her approach to business rates should be rethought.
His final request was for the Chancellor to rethink her controversial inheritance tax plans which have seen the government and farmers lock horns over measures which many believe could decimate the rural community.
A Treasury spokesperson said: “We delivered a once-in-a-Parliament Budget to wipe the slate clean and deliver the stability businesses need, laying the foundations for economic growth.
“In addition to capping corporation tax for the duration of parliament, we’re permanently cutting business rates for retail, hospitality and leisure on the high street from 2026”.
