Stuart Machin (1)

Source: M&S

M&S CEO Stuart Machin

Chancellor Jeremy Hunt should use the spring budget to reduce business rates, bring back VAT-free shopping for tourists and reform the Apprenticeship Levy, M&S CEO Stuart Machin has said.

Setting out what he’d like to see announced on Wednesday, Machin said government policy was making things “really hard” for retailers. Hunt had an opportunity to “make a big difference to our colleagues and customers”, he added.

Machin said a 6.63% increase in business rates for larger companies announced by Hunt in his autumn statement was “economically illiterate” and should be reversed.

“The total tax rate for retailers sits at 45.7%, compared to just under 40% for the FTSE 100 – with retail almost always the sector with the tightest profit margins,” Machin wrote on LinkedIn today. “The reason for this is business rates. We’re all proud to pay our way and support the country and the communities we serve. But the balance is wrong and is stymying growth.

“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.”

His call was echoed by John Webber, head of business rates at property consultancy Colliers, who also said Hunt should reverse his decision, to avoid “more retail chains going into administration”.

On the Apprenticeship Levy, Machin said restrictions on how businesses could spend it meant M&S was only able to claim a third of the £5.6m a year it contributed.

“We have an incredible employability programme at M&S called Marks and Start which has supported almost 12,000 young people into work through work placements and apprenticeships,” he said. “We fund this entirely by ourselves as the levy can’t be used for it, which is just wrong.

“In the short term, the government should make it easier for employers to use more of the funds. Longer term, while apprenticeships should remain a focus, the government should expand what the levy can be used for to other skills development and training – especially digital skills.”

On tax-free shopping for tourists, Machin said Rishi Sunak’s decision to abolish it as Chancellor in 2020 was costing the UK £10.7bn in lost GDP a year, citing a figure from the Centre for Economics and Business Research.

“Be in no doubt that cities like Paris and Milan are taking full advantage,” said Machin.

“It’s keenly felt in our capital, London. Everyone knows the sad plight of Oxford Street – once the UK’s premier shopping destination – and we are continuing our fight to invest in a new store at Marble Arch, following last week’s successful court judgment. We must do everything we can to restore the street to its former glory and get that lost footfall back.”

Former home secretary Priti Patel has also called for Hunt to scrap so-called ‘tourism tax’ in this week’s budget. Writing in The Telegraph, she said it would “give businesses a real boost” and help them compete with European rivals.

Machin made a similar call for reform of the Apprenticeship Levy ahead of the 2023 spring budget.