The UK can't prosper

M&S boss blasts tax hikes and red‑tape holding back business

Bosses have been warning for months that soaring taxes, sky‑high employment costs and the deluge of rule changes are stifling business confidence which in turn is strangling investment and stopping firms from helping the country “prosper”.

Archie Norman, Chairman of Marks & Spencer is one of the latest to voice his angst at the commercial challenges being created by government policy. He told shareholders at the M&S AGM that the UK is now facing “big regulatory headwinds” that make it harder for businesses to invest, grow and hire.

He said: “We’re in an era where macro events, governmental events, regulatory events, tax events have never been more impactful.”

We’ve been saying the same at Business111 for a long time. Small and micro businesses have been living this for a long time. Big businesses are just catching up. Maybe Government will listen to the M&S Chair where they aren’t listening to the less influential.

TAXING AND REGULATING BRITAIN TO A STANDSTILL

Retail bosses have been lining up to slam policies:

• hiking employer National Insurance

• raising minimum wage costs

• clamping down on flexible working

• tightening rules on zero‑hour contracts

• piling new environmental levies onto firms

Businesses are being squeezed from every direction and the smaller ones feel the pinch first and harder.

There is a popular view that anything with the word ‘business’ in its title has deep pockets and that businesses are just out to make more money from customers. Nothing could be further from the truth. Yes, there are rogue traders and opportunistic money-making schemes, but for real businesses, reputation is all and that means they have to keep their end users coming back or go to the wall. Small and micro business may have deep pockets, but those pockets are empty, apart from air and the crumbs at the bottom.

The Government hasn’t done with changes yet. There are still MTD, zero‑hour contracts, employment rights, HMRC deductions, reporting rules for Companies House and more in the pipeline. It all makes it harder for businesses, particularly the micro-ones, without HR and finance departments to do business. We won’t understand what we’re losing until its gone.

AO World’s boss has accused the government of living in “an economic fantasy land”, He’s moved most of his sales jobs overseas to escape the ever-growing UK’s employment costs. Fewer jobs in the UK.

M&S paid £150 million in extra taxes this year alone. One of the biggest costs was the Extended Producer Responsibility (EPR) levy, a charge on non‑renewable packaging, which cost £14million. Those are big figures and most people may have little sympathy for a firm they may perceive as having plenty of money in the kitty. However, proportionately those costs will be bigger for smaller businesses and often simply make the business untenable. It all makes it harder for business to increase pay, which is the thing the Government most wants to see, and firms want to do. Businesses of all sizes must balance their costs or go bust. If they go bust there are fewer jobs and workers lose out.

BOTTOM LINE

Britain’s biggest retailers say they’re being hammered by:

• rising taxes

• rising employment costs

• rising regulation

• rising compliance burdens

It’s holding back investment, hiring and growth. If they’re being hammered the smaller suppliers will be feeling it too. If the Government wants the UK to prosper, bosses say it needs to stop treating businesses like cash machines and start backing the companies that keep the UK workers earning, the public services operating and the country working.