Sports Direct founder Mike Ashley has sharply criticized recent cost of living and retail policies enacted by Prime Minister Andy Burnham, labeling them as "populist reactions" in a letter addressed to the prime minister.
Ashley, the billionaire entrepreneur behind the Frasers Group, accused Burnham of "jumping on 'everyday fixes' or bandwagons" while policies such as business rates and increased employment costs hinder businesses. He specifically described a proposal to increase business rates on large warehouses to fund reductions for pubs and clubs as "delusional."
A Downing Street spokesperson stated that Burnham intends to "build a new economy that backs British business, delivers growth in every postcode and ensures the essentials in life - like energy, water and housing - are affordable again." Promises to cut VAT on household electricity bills and reduce business rates for some firms are "just the start," the spokesperson added.
Earlier this month, Burnham outlined plans to revitalize high streets by empowering councils to block new vaping and betting shops. He also introduced measures to end subscription traps and ban misleading recommended retail prices that inflate the appearance of discounts.
Ashley's letter, which was seen by the BBC, urged Burnham to use his upcoming budget on October 27 to lower costs for employers and revise the government's stance on business rates. He argues that a fundamental overhaul of the tax system is needed to level the playing field between high street retailers and online competitors.
Pubs, social clubs, and live music venues are set to receive a 20% business rates cut starting in April, alongside a review into the tax's calculation, a reform long sought by high street firms. However, Ashley contended that taxing larger retailers more heavily through increased warehouse business rates, while simultaneously reducing rates for pubs and clubs, is an unworkable approach.
Burnham had previously suggested that cuts for hospitality and entertainment venues could be financed by higher levies on warehouses operated by online retailers and by targeting owners of empty high street properties.
Ashley, who built Sports Direct from a single store in 1982 into an empire employing 30,000 people, has a history of controversy regarding labor practices. He acknowledged in 2016 that workers at a Sports Direct warehouse had been paid below minimum wage, and a policy of fining staff for lateness was deemed unacceptable.
Frasers Group, now managed by Ashley's son-in-law Michael Murray, recently acquired luxury department store Harvey Nichols and plans a "significant restructuring" of the business. Ashley also inquired in his letter about Burnham's strategy for reviving Harvey Nichols, which has faced recent financial difficulties.
Echoing comments from former Marks & Spencer boss Lord Rose, Ashley stated, "I agree with him." He elaborated that "disastrous business rates position... and the dramatically increasing cost of employing people that are really causing business to struggle." He warned Burnham that failing to implement major reforms would lead to the "further devastation" of high streets and characterized any further business rates changes in the upcoming budget as "too little, too late."
Ashley also challenged Burnham's plans to curb the use of recommended retail prices, suggesting that the core issue lies in "price fixing in sporting goods and other markets," citing the rising cost of official football merchandise as an example.