Spring budget 2024: Marks boss warns business rate hike is ‘economically illiterate’

Marks and Spencer boss Stuart Machin has said operating a business under the current government is like “running up a downwards escalator with a rucksack on your back”.

Ahead of the Spring Budget tomorrow, the head of the FTSE 100 retailer told his LinkedIn followers of three measures he would like to see the Chancellor enact to help the ailing sector. 

Machin argued that plans to increase business rates next month were “economically illiterate” and retailers would feel the pinch the most. 

He said: “The total tax rate for retailers sits at 45.7 per cent, compared to just under 40 per cent  for the FTSE 100 – with retail almost always the sector with the tightest profit margins. The reason for this is business rates.

“So increasing the business rates multiplier by nearly seven per cent  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.”

The Marks and Spencer frontman has been running the business since 2022, and alongside chairman Archie Norman has  been instrumental in the recovery of the once frumpy and forgotten brand. 

Last year the firm made a return to the FTSE 100 after raking in millions in sales. 

Government policy makes being an employer of people and running stores – which the same MPs vaunt in their constituencies – really hard. Particularly so when the environment we’re operating in remains uncertain and inflation, while easing, is high. It’s like running up a downwards escalator with a rucksack on your back. Stuart Machin

Among his three wishes was also to see the government reform the apprenticeship levy and also bring back VAT shopping for international tourists. 

Machin said the absence of the levy was “keenly felt” in London, and cited it as one of the reasons for struggles on Oxford Street. 

His calls echo that of hundreds of British retailers who are urging the government to scrap the so-called ‘tourist tax’ to help boost attractions and business in the UK. 

He said: “We must do everything we can to restore the street to its former glory and get that lost footfall back.”

Machin also touched on his victory against Michael Gove in the multi-million pound redevelopment of its Marble Arch store. 

“We are continuing our fight to invest in a new store at Marble Arch, following last week’s successful Court judgement,” he added. 

“We must do everything we can to restore the street to its former glory and get that lost footfall back.”

City A.M has contacted the Treasury for a comment.