Tesco CEO Dave Lewis has warned hundreds of thousands of jobs will be lost, unless the government acts to help the retail sector.
Lewis told the British Chambers of Commerce conference in London yesterday of his “anger” that ministers failed to regard retail as “strategically important” to the economy.
He called for urgent reform of the Apprenticeship Levy and also for an online sales tax to level the playing field between bricks-and-mortar companies and competitors like Amazon, before it was too late.
“Retail and particularly food retail is, without doubt, strategically important to the UK economy,” Lewis said.
“Yet retail has no place in [the government’s] Industrial Strategy. It’s treated differently from other so-called traditional industries.
“Frankly, the way we talk about retail jobs in this country makes me angry.”
Lewis said that while the attention was on Brexit, long-term issues meant that regardless of the outcome of negotiations, retailers faced huge job losses.
“380,000 retail jobs are predicted to be lost by 2022,” he told the conference.
“If the government acts now it could benefit millions of businesses across retail and therefore the wider supply chain.”
Lewis described the policy framework for apprenticeships as “broken”.
“I agree with the National Audit Office when it questions the value, effectiveness and viability of the programme,” he said.
“Not enough flexibility. Too open to abuse. Tesco can only use 20% of money paid-in. We can’t use it to train for new skills we need. So, in effect, it’s an 80% tax on training. It makes no sense.”
He called for the government to make urgent reforms including bringing in functional skills training before apprenticeships start, funded from the levy pot, to improve the focus of apprentices.
Turning his fire on the business rates system, Lewis described the tax as a “drag on growth and competitiveness”.
“They no longer reflect the balance of sales so I believe it’s time to consider an online sales levy. Two per cent would raise £1.5bn.
“That could fund a rate cut of 20%, levelling the tax playing field between physical retailers and their online competitors.
“And it’s revenue neutral to HMT, incentivising investment and creating a more sustainable and growing tax base in retail.”
Lewis’ plan has been criticised by some, including the BRC, who claim an online tax would hit the growth prospects of retailers themselves.
But he said; “I hear the argument that this levy taxes the future. I would argue business rates are killing the present.
“And don’t doubt retailers have no choice but to pass through the extra costs. It’s hurting shoppers and households too.”