Asda chair Allan Leighton has warned that the Prime Minister's first Budget could be a "tipping point" for British businesses, saying the government must not stifle companies.
Speaking to City AM, Leighton said: "The model so far has been to inhibit growth, which is high taxation of consumers, relatively high taxation and lots of costs being piled on business, and [with] those two things you'll never grow."
He added: "We can either inhibit growth, which has been the strategy so far, not inhibit growth, which in itself would be something, or thirdly, do something that really helps growth."
Support for Mike Ashley's criticism
Earlier this week, Leighton backed Frasers Group owner Mike Ashley, who accused the Prime Minister of pursuing "populist" policies rather than dealing with the structural issues holding back the economy.
Ashley's letter to the PM said that the Government's position on business rates was "disastrous" and called for an end to regulation. He added that it was "simply delusional" to raise rates on larger retailers to subsidise other businesses.
"Rather than address the real underlying issues of how the country's financial affairs are managed [...] it is easier for you to pick topics which provide good media soundbites," Ashley told the Prime Minister.
Business rates reform and Asda recovery
Leighton said this was "absolutely right" and that reforming business rates would make a "big difference".
"All of the things that have been the policy so far have added cost to, not just retail, across the piece," he said. "And then that has reduced the profitability of those organisations, and therefore they've got less money to invest in growth. It's economics 101."
Labour had a manifesto promise to "replace" the business rates system, but despite the pleas of retailers, they are only currently reviewing these for pubs and hotels.
This comes after Asda announced that it returned to sales growth for the first time in over two years. Leighton said the supermarket is "a third" of the way through its recovery, which has involved cutting prices and overhauling its online operations.
