M&S chief slams government for raiding retail 'like piggybank'

The retail industry is being “raided like a piggy bank”, chief executive of Marks & Spencer has stated, calling on the UK government to delay or ease planned tax and recycling charges.

Writing in the Sunday Times, 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.

Machin said a plan to lower the threshold at which employers’ national insurance contributions (NICs) kick in should be phased in over two years.

Machin has stated previously too that changes to NICs would add £60m to the company’s costs which equated to about half a total rise in wage costs for M&S, including an increase in the legal minimum wage.

He wrote, "The sector already pays an effective tax rate of 55 per cent and the chancellor’s budget will add £7 billion of extra employment costs and an increased packaging levy to a sector working on margins of 3-5 per cent.

"While businesses like M&S will fight tooth and nail to hold down prices for customers, the British Retail Consortium and Institute of Grocery Distribution are already projecting food inflation of more than 4 per cent."

Machin further warned that UK food manufacturing and farming would contract, domestic products would go up in price and more food would be imported with potentially less stringent quality and environmental standards.

The retail boss also attacked the upcoming Deposit Return Scheme, which is slated to go ahead in 2027, calling it "nonsensical".

Extended producer responsibility (EPR), born as an environmental levy to fund recycling, would give retailers "a tax bill 20 times the current amount with £2 billion 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 wrote.

Machin is calling on the government to delay the increase in EPR fees and, more broadly, pause and review all Department for Environment, Food & Rural Affairs (Defra) circularity recycling schemes.

"They have been poorly planned and evidence to date shows that they are highly costly and nigh on impossible to operate," he pointed out.

" Rethink the approach to business rates. We need a proper review of business taxation facing retailers, not a tweak that redistributes funds within the sector.

"The £500,000 threshold hits high street stores, which I know the government did not foresee, so take those shops out of it.

"Ensure the Defra minister works with the sector, not against it. Co-create a food strategy focused on growing British food production, push on with a veterinary agreement to help smooth the impact of Brexit, and think again on inheritance tax.

"These would be the right decisions for the environment and welfare, too," he stated.