The chief executive of Marks & Spencer has called on the UK government to delay or ease planned tax and recycling charges, claiming the retail industry is being “raided like a piggy bank”.
Stuart Machin said that without pausing or staggering the changes to national insurance and business rates, which come into effect this April, UK retail would get smaller. He also speculated on whether successive governments were guilty of a “snobbery” about retail.
Writing in the Sunday Times, Machin said a plan to lower the threshold at which employers’ national insurance contributions (NICs) kick in should be phased in over two years. He also called for a review of planned changes to business rates that would increase the burden for retailers with large stores.
He has previously said changes to NICs, which were announced in the budget in October, would add £60m to the company’s costs. This equated to about half a total rise in wage costs for M&S, including an increase in the legal minimum wage.
Machin also wants the government to delay an increase in fees for handling the recycling of packaging and a deposit return scheme for bottles, which he claimed were “poorly planned” and “nigh on impossible to operate” as well as “highly costly”.
He said changes to the extended producer responsibility (EPR) fees, which are designed to fund recycling, would mean retailers would have to pay 20 times more, with £2bn of the fees going straight to the Treasury without improving recycling. “Retail is being raided like a piggy bank and it’s unacceptable,” he said.
A string of retail bosses have already warned that prices may have to rise, recruitment be paused or job cuts made, amid rising costs and lacklustre consumer demand.
Retailers face a £7bn increase in costs this year, according to the British Retail Consortium, including the changes to employers’ NICs, packaging levies and the increase in the legal minimum wage.
In response, 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.”
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They added: “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.”
