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M&S CEO urges Chancellor to make these three Budget reforms

Chloe Burney
04 March 2024

Ahead of the Spring Budget, Stuart Machin, the Chief Executive of M&S, has made a plea to the Government to fix broken business rates, reform the Apprenticeship Levy and bring back tax-free shopping.

Machin wrote in a statement: "At heart, retail is a people business that supports its colleagues, knows its customers, and is part of the community it serves.

"But Government policy makes being an employer of people and running stores – which the same MPs vaunt in their constituencies – really hard."

Retail - a sector which employs over three million people and pays £17 billion – is facing an uncertain environment and high inflation. For those in charge, such as Machin, "It's like running up a downwards escalator with a rucksack on your back".

Though he’d like the Government to rethink its entire industrial strategy, ahead of the budget, Machin urges Chancellor Jeremy Hunt to do these three things:

  • Help Fix the broken business rates system

The total tax rate for retailers sits at 45.7%, compared to just under 40% for the FTSE100 – with retail almost always the sector with the tightest profit margins. The reason for this is business rates.

So increasing the business rates multiplier by nearly 7% from 1 April - at a time when the Government is looking to tackle inflation, retailers are working hard to offer customers the very best value and people are struggling with the cost of living - is economically illiterate.

  • Commit to reforming the Apprenticeship Levy

Reforming the Levy would unlock the opportunity for thousands more to learn as well as earn in the retail sector. Every year M&S contributes c.£5.6 million to the Apprenticeship Levy, but they can only use a third of that due to restrictive requirements and bureaucracy.

M&S' programme called Marks and Start has supported almost 12,000 young people, but it's funded entirely by the company as the Levy can’t be used for it. The Government is urged to make it easier for employers to use more of the funds.

  • Bring back tax-free shopping

The decision to add 20% VAT to tourists coming to our cities is costing the UK £10.7bn lost in GDP a year (according to CEBR). It’s keenly felt in our capital, London. According to Machin, it "must be reversed".

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