Business

M&S boss takes pre-budget swipe at tax burden

The chief executive of Marks & Spencer (M&S) has described operating under the current government as “like running up a downwards escalator with a rucksack on your back”.

Writing on his LinkedIn account, Stuart Machin appealed to the chancellor to take three steps to help the retail sector in Wednesday’s budget, describing planned increases to business rates as “economically illiterate”.

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He argued the industry’s tax burden was unfair at a time when consumer demand continues to be constrained by the effects of the evolving cost of living crisis and that tax rises risked stoking inflation through higher prices at the till.

Mr Machin, who has run M&S since 2022, said: “Government policy makes being an employer of people and running stores – which the same MPs vaunt in their constituencies – really hard.

“Particularly so when the environment we’re operating in remains uncertain and inflation, while easing, is high.

“It’s like running up a downwards escalator with a rucksack on your back.”

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Tax cuts need to be ‘responsible’

He added: “We could have a longer conversation about how the government must do more to understand the importance of the retail sector to the economy (a sector which employs over 3 million people and pays £17bn in taxes by the way) and the need for a fully-fledged Industrial Strategy, but this budget probably isn’t the right time for that.”

His three wishes include: Reform of the “broken” business rates system, changes to the Apprenticeship Levy and the return of tax-free shopping for overseas’ visitors.

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Sir Paul Smith: UK needs tourists back

Among his assertions was the total tax rate for retailers stood at 45.7% compared with just under 40% for FTSE 100 companies as a whole.

He blamed business rates for the retail sector having the “tightest profit margins”.

Stuart Machin. Pic: M&S
Image:
Stuart Machin. Pic: M&S

Mr Machin said: “Increasing the business rates multiplier by nearly 7% from 1 April – at a time when the government is looking to tackle inflation, retailers are working hard to offer customers the very best value, and people are struggling with the cost of living – is economically illiterate.”

He revealed his wish list just days after scoring a significant legal win over the government.

The High Court ruled last week that the levelling-up secretary, Michael Gove, was wrong to block the company’s plans to demolish one of its flagship London stores.

Read more: Spring budget 2024: What to expect – from tax cuts to vaping duty

Mr Machin wrote: “Everyone knows the sad plight of Oxford Street – once the UK’s premier shopping destination – and we are continuing our fight to invest in a new store at Marble Arch, following last week’s successful court judgement.

“We must do everything we can to restore the street to its former glory and get that lost footfall back.”

Sky News was contacting the Treasury for comment.

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