Marks & Spencer chief executive Stuart Machin has issued a stark warning that the Labour Government's 2024 Autumn Budget policies risk shrinking the UK retail sector and hampering wage growth.
Last October, Chancellor Rachel Reeves outlined various policy changes impacting businesses, including hikes to the National Living Wage and the National Insurance contribution for employers.
Writing in the Sunday Times, the M&S boss cautioned that the current Budget approach would lead to significant consequences for the industry and suggested the Chancellor reverses course.
"The blunt truth is, left how it is, the Budget means UK retail will get smaller," Machin wrote. "At M&S we are growing, but others are not and there is no doubt that there will be fewer jobs, fewer shops, and slower wage growth across the sector as a whole."
The Marks & Spencer chief executive criticised what he called "ill-thought-through decision-making" in the Autumn Budget. "Retail is being raided like a piggy bank and it's unacceptable," he added.
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The Chancellor is being urged to reconsider her previous Budget decisions
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Machin is not the only supermarket boss who has called on Reeves to make a U-turn. Last year, more than 70 major retailers, including Tesco, Asda and Sainsbury's, have warned of inevitable price increases and job losses in an open letter to the Chancellor.
The letter, coordinated by the British Retail Consortium (BRC), emphasised ongoing concerns about the Budget's changes to employers' National Insurance contributions.
Businesses acknowledged Labour's focus on improving public services but warned that "the sheer scale of new costs and the speed with which they occur create a cumulative burden".
These changes, which include packaging levies and minimum wage increases, will cost the retail industry £7.06billion annually. The group, which also includes Amazon, Boots, Greggs and Marks & Spencer, has requested a meeting with Reeves to discuss potential adjustments to the timeline of these changes.
Supermarkets have came out against the Government's tax agenda gbnewsIn his latest intervention, Machin specifically highlighted concerns about the Employment Rights Bill's impact on workforce flexibility. "The Employment Rights Bill means we would have to say no to a colleague usually working weekend hours who requests more shifts," he explained.
He also warned that changes to the National Insurance contributions threshold would disproportionately affect part-time workers.
These measures form part of what the retail boss described as problematic Budget decisions impacting the sector.
Despite his criticisms, Machin acknowledged some "commendable" elements in recent Budget announcements from Reeves.
He praised the Chancellor's "focus on long-term planning" and "good ideas to free up investment in infrastructure".
The M&S boss proposed phasing the decrease of the National Insurance contribution threshold over two years to help retailers manage the impact.
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Robert Forrester, Chief Executive of Vertu Motors, said the Budget had created difficulties VERTU MOTORS/PAThe Government has defended its Budget measures as necessary to address a "black hole" in the country's finances and boost economic growth.
It highlighted increased employment allowances that exempt some smaller firms from paying NICs.
Outside of supermarkets, car dealership Vertu Motors has already implemented cuts in response to Budget cost increases.
The company was forced to close most of its showrooms on Sundays as part of efforts to manage the financial impact.
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