Business rates hurt ‘levelling up’, says Tesco boss

The head of Britain’s biggest retailer has joined calls for the government to scrap the controversial business rates system.

According to The Telegraph, Tesco chief executive Ken Murphy said the tax “doesn’t work for the country” and hit poorer areas hardest.

“This is working against the levelling up agenda that the government has so publicly made part of its policy,” he said.

It comes as a number of backbench Conservative MPs demanded that Chancellor Rishi Sunak rework the system.

READ MORE: Tesco denies ‘defensive’ move against private equity

Tesco has argued for a one per cent tax on online sales and a 20 per cent reduction in business rates ahead of an overhaul this autumn.

The British Independent Retailers Association believes that a two per cent tax would allow the government to ditch the system altogether.

At the Labour Party Conference last month, Shadow Chancellor Rachel Reeves announced plans to bin business rates by raising taxes on e-commerce.

“High street businesses pay over a third of business rates, despite making up only 15 per cent of the overall economy,” she said.

The move has cross-party support, with “red wall” Tories Dehenna Davison, James Grundy and Lee Anderson warning that the high street is most vulnerable in areas Boris Johnson has pledged to “level up”.

Murphy refused to be drawn on comments by cabinet ministers that big business was “drunk on cheap labour”. 

However, he insisted that retailers were investing in skills, and were a “beacon of progress” compared to other industries.

He added that Tesco had raised shop-floor wages by 30 per cent since 2014 and paid £9.55 per hour, around 7 per cent more than the minimum wage.

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