UK retailers are being “raided like a piggy financial institution”, the boss of Marks & Spencer has stated, because the sector faces rising taxes.
Writing within the Sunday Occasions, Stuart Machin stated retailers have been dealing with a sequence of headwinds, together with the rise in Nationwide Insurance coverage Contributions (NICs) paid by companies and better packaging levies.
He referred to as for quite a few adjustments from the federal government, together with staggering the NIC adjustments over time.
A Treasury spokesperson stated measures launched in final yr’s Price range aimed to ship stability to companies and create the circumstances for progress.
Mr Machin stated that a lot of the bulletins made by Chancellor Rachel Reeves in a speech final month have been “commendable”, such because the concentrate on long-term planning and makes an attempt to spice up funding in infrastructure.
However he added that if the federal government needed to spice up progress shortly, then “lightening the burden that the Price range loaded onto the retail sector” must be a precedence.
In October’s Price range, the federal government elevated the speed of Nationwide Insurance coverage (NI) paid by employers from April, and likewise diminished the brink that employers begin paying it at from £9,100 to £5,000. April can even see a rise within the Nationwide Residing 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 a much bigger increase for youthful employees and apprentices, has been welcomed by commerce unions.
The Treasury has additionally stated 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 adjustments 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 a few of the measures.
Final yr, M&S reported a leap in annual income to £672m for the 12 months to March. In his article, Mr Machin stated that M&S was “rising, however others are usually not and there’s no doubt that there shall be fewer jobs, fewer retailers and slower wage progress throughout the sector as a complete”.
In addition to adjustments 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 total 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 stated 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 referred to as for the federal government to section within the timing of the NICs enhance over two years – echoing a name by Subsequent boss Lord Wolfson – to offer retailers “respiration house”.
Mr Machin additionally stated the EPR charges must be delayed and the federal government ought to rethink its method to enterprise charges.
A Treasury spokesperson stated: “We delivered a once-in-a-Parliament price range to wipe the slate clear and ship the soundness companies want, laying the foundations for financial progress.
“Along with capping company tax in the course of parliament, we’re completely slicing enterprise charges for retail, hospitality and leisure on the excessive road from 2026”.
