M&S boss calls on retail regulation pause ahead of spring budget

The chief executive officer of UK supermarket chain M&S has called on chancellor Jeremy Hunt to pause upcoming regulation for retail and a strategic overhaul of legislation ahead of the spring budget.

In a blog post, M&S boss Stuart Machin said that while he supports the government’s focus on “balancing the books, reasserting its economic competency, and giving the markets, businesses and consumers, the stability they want and need,” a recent bounce in GDP cannot cover over “the vulnerability of UK economy.”

He highlighted that the UK is the only G7 economy forecast to shrink in 2023, and said that 2022 saw "the highest number of businesses go bust in 13 years and retail vacancy rates remaining higher than they were before the Covid-19 pandemic".

Machin praised the government’s Autumn Statement which addressed “the untenable rise in business rates by freezing the multiplier and ending downwards transition” and dropped the “short-sighted proposal” for online sales taxes.

In light of the fact that “retail contributes over a quarter of rates collected despite generating only 5.2% of GVA,” Machin said that the government should “take decisive, practical action and reduce the multiplier back to its original 1990 level of 35p for all ratepayers.”

While proposing this policy, the M&S boss also called for action to improve the UK's approach to skills, net zero and regulation.

In regards to skill, Machin argues that "UK policy is not fit for purpose" with one potential fix being the re-scope of the Apprenticeship Levy "into a broader skills fund so businesses have ‘credits’ you can draw down and spend as you wish within the boundaries of parameters set by Government". M&S can only use around 34 per cent of its annual £5.4 million contribution to the Levy, Machin noted.

On carbon reporting and net-zero, Machin has called on the government to roll out charging points for e-vehicles and develop on-shore recycling for key materials. He also calls on the extension of the capital allowances super deduction in an effort to make investment in energy efficiency more attractive.

Machin was most critical of the government's approach to retail regulation and taxation, arguing that "in my 30-year career, I have never known the burden on retail sit as heavy as it does today”. He called for “a strategic overview of legislation and its implementation; with a view to pausing new regulations that will add cost to an under pressure sector.”

He said that while retailers "are having to contend with widespread changes like the HFSS location restrictions and various Deposit Return Schemes (DRS) across the UK,"regulators are also considering further initiatives "such as restrictions on single use plastic and new burdensome reporting requirements."

Machin concluded that “we share the Government’s ambition for much-needed change,” but that “when you put them together, they risk being overwhelming and unproductive – creating an unsustainable ask.”

Elsewhere, the retailer has announced a collaboration with eco-conscious fashion brand Nobody's Child to launch pop-ups in 30 stores across the UK. The 400ft seasonal pop-up shops will be open from March to August and offer a range of women's clothing items.

The launch follows the successful trial of Nobody's Child in 10 M&S stores in 2022, and is an expansion to the supermarket's growing 'Brands at M&S" online platform which seeks to reposition the company as an omnichannel retailer.

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