Britain’s biggest retailers have warned Rachel Reeves against further tax hikes. Tesco, Sainsbury’s, Boots and John Lewis are among companies who have written to the Chancellor ahead of the upcoming autumn budget.
The retailers, part of the British Retail Consortium, warn that more taxes on businesses could lead to Sir Keir Starmer breaching Labour’s manifesto pledge to provide “good jobs and higher living standards”. They suggest that they will not be able to “absorb” further tax rises and prices will have to go up.
They want that food inflation could reach 6% later this year, while policies such as hiking employers’ national insurance have already added £7 billion in costs to businesses.
The letter states: “As retailers, we have done everything we can to shield our customers from the worst inflationary pressures but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face.
“This year government policy has added £7 billion in new costs to retail businesses, resulting from changes to employer national insurance, higher employment costs, and the introduction of a new packaging tax. Similar increased costs are also starting to flow through our supply chains.
“Food prices — which had begun to ease — are once again climbing. The British Retail Consortium expects food inflation to hit 6% later this year, driving up household bills just as winter energy costs start to kick in.
“The impact is further being felt by communities as retail investment falls and 100,000 retail jobs have been lost over the last year alone.
“Labour’s manifesto made a clear and welcome promise to deliver good jobs and higher living standards but if future policy decisions lead to rising prices and fewer jobs, then those commitments are at risk.
“Instead, the retail industry is uniquely placed to help deliver the government’s central economic mission given our presence in almost every community across the UK.”
The companies are concerned about an increase in business rates on large stores which could be confirmed in the budget.
A Treasury spokesman said: “We are a pro-business government — 380,000 jobs have been created since the start of this parliament and business confidence is at a 10-year high, according to a recent Lloyds Bank survey.
“Since the election, we have struck three major trade deals with the EU, US and India, business rates are being reformed and corporation tax is capped at 25%.”