Chancellor Rachel Reeves is set to present her first budget tomorrow and much of retail is hoping, amongst other things, that business rates reform features on her list of changes.
Here’s what the bosses of some of the UK’s biggest retailers are keeping an eye out for.
Stuart Machin, CEO, M&S
“M&S is one of the biggest taxpayers in the UK, contributing £480m to the Treasury. We’re proud to contribute to the public services that the communities we serve rely on to succeed. I support the new Government’s focus on making work pay. M&S doesn’t have zero hours contracts, and we invest beyond the proposed new standards on things like maternity and paternity leave because we value our colleagues.
“Yet when I hear about plans to increase National Insurance, a tax with no link to profit which hits bigger employers like us and our smaller suppliers, I’m concerned. The Chancellor was right in the past to call National Insurance a tax on workers – it makes it more difficult to offer the life changing opportunity of a job. Particularly if you hike other tax that hit retailers, like business rates or fuel duty.
“Labour’s manifesto contained lots of great pledges, but I worry the reality of government is watering them down. Bold ambitions to “overhaul” business rates and to give firms flexibility over half of their apprenticeship levy funds must not be missing from the Chancellor’s statement.
“The ultimate test is on delivery. The Government is absolutely right that unlocking investment means stripping away red tape, which requires more than just unclogging the planning system.”
Nish Kankiwala, CEO, and Peter Ruis, executive director, John Lewis Partnership
Kankiwala: “There’s a lot of new news coming, both in the budget and as the new government takes shape in terms of its agenda and we’re very supportive of its intent to grow the economy.
“That’s going to be really critical for businesses like ours and as that employment legislation comes through, we’ll watch and see, but we remain in constructive dialogue and we look forward to what comes out of that.”
Ruis: “I’ve genuinely been through too many budgets in my career. We’re best just focusing on the retail. If we do our job really, really well wherever it goes, we can trade out of it.
“Business rates may move this year, they may move next year, we’ll adapt. We’ll change, and we’ll make sure our offer is the best it can be […] and I suspect, from a consumer point point of view, won’t be as big a deal. Whatever it is, we’ll adapt.”
Shirine Khoury-Haq, CEO, Co-op
“We’ve long called for reform for the business rates system, which we believe is fundamentally broken. And you only have to look at our UK high streets to see that it’s an issue. For us, our business rates have increased £20m over the last two years – that’s 20% – up to £111m per annum. So, we are hoping that the Budget will address that in order for us to be able to revitalise our high streets.
“There needs to be protection of bricks-and-mortar stores and there needs to be equity in terms of online businesses paying their share of tax as well…For us, we are the most shopped shop on the retail high street – we have 2.5m transactions every day, over 800m transactions per year. We are absolutely committed to staying on the high street as long as it’s affordable for us.”
“When we look at the workers’ rights that have been proposed by the government, we’re actually encouraged to see a number of things that we’ve been doing for some time being put on a statutory footing,”
Simon Roberts, CEO, Sainsbury’s
“We need to see interest rates continue to come down because that directly impacts household spending. I think clarity in the budget, one way or another, is helpful.”
Darcy Willson-Rymer, CEO, Card Factory
“What’s really important to us is that we get certainty and transparency. We support some of the announcements the government’s made around sorting out business rates, creating a level playing field,we think that that’s very important.”
David Epstein, managing director of premium and luxury, Frasers Group
“There needs to be a complete reform of the business rates, which we [believe] are archaic as they are.”
Helen Dickinson, CEO, British Retail Consortium
“Consumers want diverse and thriving high streets, but this is held back by the broken business rates system. It is the biggest barrier to local investment and prevents the creation of new shops and jobs.
“Already, the industry pays far more than its fair share – retail accounts for 5% of the economy, but pays 7.4% of all business taxes, and over 20% of all business rates. The Budget is a great opportunity to right this imbalance, ensuring that retail pays a fairer level of business rates.”
Scott Parsons, chief operating officer, Unibail-Rodamco-Westfield UK
“We urgently call on the Government to action its election pledge to review business rates and deliver meaningful action instead of the token gestures and disregard that retail property has suffered for the past decade.
“While it’s promising to hear reports that the Government is finally taking steps to level the playing field between online and offline players, this must be followed by swift action. The current tax burden is unsustainable…
“The strain that this is putting on physical retail is having a tangible impact – 7,000 shops were forced to close across UK high streets this year. Now is the time for the Chancellor to create real change for a vital industry that currently employs over 5.7 million people, contributes over £100bn each year to the UK economy and lies at the heart of our communities. A complete overhaul of the scheme would go a long way in backing up Labour’s promise to kick start economic growth.”
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