Marks & Spencer chief executive Stuart Machin has launched a scathing attack on the government, accusing it of orchestrating “one of the biggest tax grabs in history” and failing to stimulate economic growth.
The retail chief told journalists that the three Budgets delivered since Labour assumed power have generated approximately £73bn in additional taxation, arguing that the government has fallen short of its commitment to drive economic growth.
He said: “When you look at the last three Budgets, you can't just ignore the fact that this is probably one of the biggest tax grabs in history that I've seen.”
Budget dismissed as ‘a whole lot of nothing’
Machin dismissed last week's Budget as “a whole lot of nothing”, stating that M&S were “disappointed” by Healey's first major act as Chancellor “because it didn't really address the issues that we needed to focus on growth”.
Despite the Budget being presented as a “do no harm” event, Machin warned that the Chancellor's business rates announcement would pile a further £10m on top of the £170m his company already pays annually, as reported by City AM.
Retailers rounded on Healey for claiming to have frozen business rates bills for all high street firms, despite these levies continuing to rise in line with inflation. The 3.5 per cent increase is set to heap £250m in additional costs onto retailers in the coming year.
Rising costs and consumer confidence
Machin said: “We know all of the headwinds that we've seen from [the] government. [...] The extra costs from the Budget in '24 added another £150m to our cost base, and actually, when you look at things coming down the road, I can't see that getting any better.”
“Just in April, this new packaging tax, which we were told was meant to help cancel councils and reinvest in recycling, but the previous Chancellor admitted it was just a tax for the Treasury. Just in one month, we paid £40m out of our food margin.”
The M&S chief also blamed the government for undermining British consumer confidence, which experienced its sharpest fall in a decade during September, according to GfK.
He took aim at the government's recently-issued guidance urging shoppers to stockpile three days' worth of provisions, which grocers said had taken them by surprise.
Machin said: “Everything is pointing to people saying 'we're worried about cost of living, we're worried about the headwinds', and of course they are being told to worry as well.”
“The stockpiling announcement a couple of weeks ago, when you get told by the government to stockpile, everyone sits there and says: 'well, you're telling me to worry about something.'”
Calls for growth measures and profit results
Prior to the Budget, Machin pressed the Chancellor to implement six measures to “get Britain growing by taking the handcuffs off business and putting money back in people's pockets”. These encompassed reducing packaging levies and reversing increases to employment costs.
Machin noted that the Treasury disregarded five of these proposals, although he acknowledged the government's advancement towards an agreement to eliminate post-Brexit checks on food and agricultural exports.
The current checks make it “very problematic” for M&S to transfer stock to its stores in the Republic of Ireland, he said. Machin suggested that an agreement to realign food standards with the European Union would be a “big win”.
On Wednesday, Marks & Spencer reported a £355m pre-tax profit as double-digit growth in its food division helped the retailer push forward with its recovery from last year's cyber attack. However, the group cautioned that its fashion, home and beauty arm remains in the “foothills” of its resurgence.
