Retail bosses ramp up pressure on Healey to cut ‘ridiculous’ tax burden

The bosses of Marks & Spencer and John Lewis have piled further pressure on the government to slash the “ridiculous” tax burden facing high street firms.

Stuart Machin, chief executive of M&S, called on Chancellor John Healey to “restore hope” within the retail industry by turning a corner from Labour’s last two budgets, which he dubbed a “disaster”.

The strongly-worded intervention, coming less than three weeks before the Budget, will put further pressure on Andy Burnham to deliver on his pledge to rejuvenate Britain’s high streets and town centres.

While the Prime Minister has focussed these efforts on tax breaks for pubs and crackdowns on gambling shops, retailers have warned Burnham that he must help the high street’s biggest operators lead this revival.

Writing in the Daily Mail, Machin said: “I’ve never hidden what I thought of the last two budgets. They were a disaster. Britain needed a plan for growth and got a pile of new taxes and regulations instead. I know money is tight.

“I’m not asking the chancellor to rip up his fiscal rules, but at the very least, he should start unravelling the mistakes of the last two budgets.”

Machin called on Healey to overturn “patently ridiculous” recycling rules, ensure Labour’s workers’ rights crackdown doesn’t “ban the Saturday job” and secure a “common sense” food trade deal with the European Union.

While the Prime Minister has “promised hope again,” the Chancellor must deliver this by “taking the handcuffs off business and putting money back in people’s pockets,” the M&S boss said.

‘Fundamental misunderstanding’ of retail

Jason Tarry, the chairman of John Lewis and Waitrose, added his voice to the number of retail bosses urging Healey not to hike taxes on the biggest high street businesses.

Concern is mounting in the industry that Burnham could fund business rates cuts for pubs by hiking the bills paid by warehouses, which retail bosses say would send their costs spiralling and ultimately push up prices for shoppers.

Writing in the The Telegraph, Tarry said that a so-called “warehouse tax” would “reveal a fundamental misunderstanding of how modern high streets work”.

The John Lewis boss warned that the tax would hit “a far greater number of high street shops than warehouses.

“In our case, the higher charge applies to just 18 distribution centres, but over 200 John Lewis and Waitrose stores.”

Earlier this week, the boss of Tesco urged Healey not to impose the “warehouse tax,” adding that he has told the government to exempt retailers from the highest business rates multiplier.

Ken Murphy, chief executive of the UK’s biggest grocer, said: “We have long argued that the rate system is fundamentally unfair, that retailers pay – on average – four times their fair share of rates.”

The British Retail Consortium (BRC) – which represents grocers like Tesco, Sainsbury’s and Marks & Spencer – has hit out at the “punishing” tax burden facing the industry in recent months.

Retailers pay 72p in tax for every pound they make, according to the BRC’s analysis, which makes it the second-highest taxpaying sector, behind only hospitality.