M&S boss says retailers being ‘raided like piggy banks’
UK retailers are being “raided like a piggy financial institution”, the boss of Marks & Spencer has mentioned, because the sector faces rising taxes.
Writing within the Sunday Instances, Stuart Machin mentioned retailers had been dealing with a collection of headwinds, together with the rise in Nationwide Insurance coverage Contributions (NICs) paid by corporations and better packaging levies.
He known as for a lot of modifications from the federal government, together with staggering the NIC modifications over time.
A Treasury spokesperson mentioned measures launched in final yr’s Funds aimed to ship stability to companies and create the circumstances for development.
Mr Machin mentioned that lots of the bulletins made by Chancellor Rachel Reeves in a speech final month had been “commendable”, such because the give attention to long-term planning and makes an attempt to spice up funding in infrastructure.
However he added that if the federal government wished to spice up development shortly, then “lightening the burden that the Funds loaded onto the retail sector” needs to be a precedence.
In October’s Funds, the federal government elevated the speed of Nationwide Insurance coverage (NI) paid by employers from April, and in addition decreased the edge that employers begin paying it at from £9,100 to £5,000. April may also see a rise within the Nationwide Dwelling Wage.
The federal government has defended its tax rises as essential to keep away from cuts to public providers, and the rise within the minimal wage, with an even bigger increase for youthful staff and apprentices, has been welcomed by commerce unions.
The Treasury has additionally mentioned that resulting from exemptions for smaller companies, greater than half of employers will both see a lower or no change of their Nationwide Insurance coverage payments.
However the modifications have provoked criticism from companies, and in November final yr M&S was one of many signatories to a letter despatched by main retailers to the chancellor asking her to rethink among the measures.
Final yr, M&S reported a bounce in annual earnings to £672m for the 12 months to March. In his article, Mr Machin mentioned that M&S was “rising, however others aren’t and there’s no doubt that there will likely be fewer jobs, fewer retailers and slower wage development throughout the sector as a complete”.
In addition to modifications to employment rights and the rise in employers’ NICs, Mr Machin additionally criticised a brand new packaging levy.
The prolonged producer accountability (EPR) measure is designed to make producers pay the complete internet prices of managing and recycling packaging waste, and so goals to cut back unsustainable packaging.
In its letter to the chancellor in November, the British Retail Consortium estimated the measure would price the sector £2bn.
Mr Machin mentioned EPR would “give retailers a tax invoice 20 occasions the present quantity with £2bn going straight to the Treasury as common taxation and no enchancment to recycling”.
“Retail is being raided like a piggy financial institution and it is unacceptable.”
He known as for the federal government to part within the timing of the NICs improve over two years – echoing a name by Subsequent boss Lord Wolfson – to offer retailers “respiration house”.
Mr Machin additionally mentioned the EPR charges needs to be delayed and the federal government ought to rethink its method to enterprise charges.
A Treasury spokesperson mentioned: “We delivered a once-in-a-Parliament finances to wipe the slate clear and ship the soundness companies want, laying the foundations for financial development.
“Along with capping company tax at some point of parliament, we’re completely chopping enterprise charges for retail, hospitality and leisure on the excessive road from 2026”.
