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 Occasions, Stuart Machin mentioned retailers had 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 mentioned measures launched in final 12 months’s Finances aimed to ship stability to companies and create the situations 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 Finances loaded onto the retail sector” ought to be a precedence.
In October’s Finances, the federal government elevated the speed of Nationwide Insurance coverage (NI) paid by employers from April, and likewise decreased the brink that employers begin paying it at from £9,100 to £5,000. April may 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 enhance for youthful staff and apprentices, has been welcomed by commerce unions.
The Treasury has additionally mentioned that as a result of exemptions for smaller companies, greater than half of employers will both see a minimize or no change of their Nationwide Insurance coverage payments.
However the adjustments have provoked criticism from companies, and in November final 12 months 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 12 months, M&S reported a leap 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 outlets and slower wage development throughout the sector as an entire”.
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 scale 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 instances the present quantity with £2bn going straight to the Treasury as basic 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 improve over two years – echoing a name by Subsequent boss Lord Wolfson – to present retailers “respiratory house”.
Mr Machin additionally mentioned the EPR charges ought 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 funds to wipe the slate clear and ship the soundness companies want, laying the foundations for financial development.
“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”.
