Marks & Spencer CEO Urges Chancellor to Cut Business Costs

Marks & Spencer CEO Stuart Machin has urged UK Chancellor John Healey to reduce the burden of taxes and regulations on businesses, arguing that such measures are hindering economic growth. In a letter to the Chancellor and an accompanying opinion piece, Machin detailed six proposals, three of which he claims would not incur any cost to the Treasury.

Machin, whose company faces significant annual costs from taxes and levies, stated that the previous two Budgets were detrimental to businesses and consumers. He emphasized that retail plays a crucial role in the everyday economy, employing over three million people, but operates on thin margins, making it difficult to absorb additional government-imposed costs.

M&S itself is investing over £2 billion in its stores, supply chain, and technology over the next three years. Machin noted that any new taxes directly reduce the funds available for such investments.

Key Proposals for Economic Stimulus

Machin's six proposals aim to alleviate financial pressures on businesses and consumers:

1. Scrap the Deposit Return Scheme: Machin argues this scheme, due to launch next October, is "ridiculous." It would require consumers to pay an additional 20p for drinks and return them to shops, while retailers face substantial setup and operational costs, diverting funds from investment.
2. Amend the Employment Rights Act: The current wording, Machin suggests, could inadvertently ban the traditional Saturday job by classifying normal weekend shifts as "low hours" contracts. This could disproportionately affect young people seeking employment.
3. Secure an EU Food and Drink Deal: Negotiating a deal with the European Union would reduce red tape for importing European foods and increase export opportunities for British produce, potentially lowering costs for consumers and farmers.
4. Reverse National Insurance Threshold Changes: Machin advocates for undoing the cut to the National Insurance threshold for employers, which he states has significantly impacted retailers, particularly those with entry-level and part-time positions, as well as their suppliers.
5. Reform Business Rates: The current business rates system, where retail accounts for 5% of the economy but pays over 20% of the total business rates, is unsustainable. Machin highlighted that M&S pays approximately £170 million annually and criticized the approach of taxing supermarkets to subsidize other high street businesses.
6. Eliminate the Packaging Tax: Machin described the Extended Producer Responsibility, or packaging tax, as a "tax of almost £2 billion on food and drink." He noted that M&S incurred an additional £40 million charge in April alone due to this tax and believes its removal would benefit shoppers.

Machin concluded that the upcoming Budget presents a new opportunity for Chancellor Healey to demonstrate a commitment to business recovery and economic growth, fulfilling the Prime Minister's promise of "hope again."