Marks & Spencer boss Stuart Machin has urged chancellor Rachel Reeves to not take “the easy way out”, after reports that the government is considering raising the national insurance paid by employers in the upcoming budget.
In an article for The Times, Machin said he sympathised with the problems the new Labour government faces at its first fiscal event. “Economic growth is too low, government debt too high and we’re less productive than our international peers,” Machin wrote, comparing the situation to the one he found when he took over as boss of M&S.
“The easiest thing would have been to raise prices, delivering short-term profits to shareholders,” he wrote. “But it would have been the wrong thing. Instead, we invested in value and quality to deliver for our customers, earning back their trust.”
He said any moves to raise taxes in the new budget would amount to “a short-term, easy fix”, arguing instead that Labour should make the “much harder decisions around fundamentally re-engineering the British economy, tackling the issues that have held us back for decades.”
He added that national insurance was a tax “with no link to profit which hits bigger employers like us and our smaller suppliers”. He also said Reeves was right in the past to call national insurance “a tax on workers” adding “it makes it more difficult to offer the life-changing opportunity of a job, particularly if you hike other tax that hits retailers like business rates or fuel duty”.
Machin proposed that Reeves and the government should “be honest with the public” without “kitchen sinking, repeating and exaggerating grievances to support a political narrative.” The long lead-up to the budget, combined with Reeves and Starmer’s many gloomy pronouncements about the state of the UK’s finances has meant “consumer confidence has nosedived” adding “we need messages that are direct, not despondent. Leaders who look forward, not back.”
The M&S boss wrote that “Labour’s manifesto contained lots of great pledges” which he says he worries have been “watered down” by the realities of governance – such as “bold ambitions” to overhaul business rates and give businesses more control over their apprenticeship levy funds.
“The ultimate test is on delivery,” he concludes. “The Government is right that unlocking investment means stripping away red tape, which requires more than just unclogging the planning system.”
“As each decision comes before them on a new piece of regulation or a proposed development, political and activist pressure will mount – but they must stick to their word. Businesses are littered with regulatory burdens that add cost and complexity for little public benefit.”
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