M&S CEO Stuart Machin has called for changes to the “broken” business rates system and apprenticeship levy in the upcoming Spring Budget.
Writing on LinkedIn today (4 March), Machin said that current government policy “makes being an employer of people and running stores really hard.”
He is urging chancellor Jeremy Hunt to help fix the business rates system, asking for “decisive action to reduce the multiplier back to its original level but, at the very least, an adjustment to the current inflationary uplift.”
Machin said that retail is “almost always the sector with the tightest profit margins,” and claims “the reason for this is business rates”.
Currently, total tax for retailers sits at 45.7%, in comparison to just under 40% for the FTSE100.
He said: “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.”
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Machin explained that if the business rates multiplier is increased by almost 7% from 1 April, the move would be “economically illiterate” 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.”
The M&S chief executive is also urging for the government to commit to reforming the apprenticeship levy which he said would “unlock the opportunity for thousands more to learn as well as earn in the retail sector.”
Every year the upmarket retailer contributes around £5.6m to the apprenticeship levy, however it is only able to use a third of this due to “overly restrictive requirements and bureaucracy”.
Machin said that while M&S has supported almost 12,000 young people with work placements and apprenticeships, it has done with through its employability programme ‘Marks and Start’ which is entirely funded by the retailer as the levy cannot be used for it.
“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,” he added.
