M&S boss says retailers being 'raided like piggy banks'
2025-02-09
Category: economic

UK retailers are being "raided like a piggy bank", the boss of Marks & Spencer has said, as the sector faces rising taxes.Writing in the Sunday Times, Stuart Machin said retailers were facing a series of headwinds, including the increase in National Insurance Contributions (NICs) paid by firms and higher packaging levies.He called for a number of changes from the government, including staggering the NIC changes over time.A Treasury spokesperson said measures introduced in last year's Budget aimed to deliver stability to businesses and create the conditions for growth.
Mr Machin said that many of the announcements made by Chancellor Rachel Reeves in a speech last month were "commendable", such as the focus on long-term planning and attempts to boost investment in infrastructure.But he added that if the government wanted to boost growth quickly, then "lightening the burden that the Budget loaded onto the retail sector" should be a priority.In October's Budget, the government increased the rate of National Insurance (NI) paid by employers from April, and also reduced the threshold that employers start paying it at from £9,100 to £5,000. April will also see an increase in the National Living Wage.The government has defended its tax rises as necessary to avoid cuts to public services, and the rise in the minimum wage, with a bigger boost for younger workers and apprentices, has been welcomed by trade unions.The Treasury has also said that due to exemptions for smaller businesses, more than half of employers will either see a cut or no change in their National Insurance bills.But the changes have provoked criticism from businesses, and in November last year M&S was one of the signatories to a letter sent by major retailers to the chancellor asking her to reconsider some of the measures.
Last year, M&S reported a jump in annual profits to £672m for the 12 months to March. In his article, Mr Machin said that M&S was "growing, but others are not and there is no doubt that there will be fewer jobs, fewer shops and slower wage growth across the sector as a whole".As well as changes to employment rights and the increase in employers' NICs, Mr Machin also criticised a new packaging levy.The extended producer responsibility (EPR) measure is designed to make producers pay the full net costs of managing and recycling packaging waste, and so aims to reduce unsustainable packaging.In its letter to the chancellor in November, the British Retail Consortium estimated the measure would cost the sector £2bn.Mr Machin said EPR would "give retailers a tax bill 20 times the current amount with £2bn going straight to the Treasury as general taxation and no improvement to recycling"."Retail is being raided like a piggy bank and it's unacceptable."He called for the government to phase in the timing of the NICs increase over two years - echoing a call by Next boss Lord Wolfson - to give retailers "breathing space".Mr Machin also said the EPR fees should be delayed and the government should rethink its approach to business rates.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."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".