Marks and Spencer’s chief executive has called on the government again to implement the increases in employers’ contributions to national insurance announced in the October Budget.
Stuart Machin stated that he “wholeheartedly” supports an amendment to legislation proposed by Lord Simon Wolfson.
Next, a rival retailer and a Conservative peer, has proposed phasing out the NICs reduction over a two-year period to help employers deal with its impact.
The Chancellor Rachel Reeves, announced in October, that, along with increasing employers NICs to 15% by April 2025, “secondary thresholds” would be reduced from PS9100 to PS5,000 each year.
Next said that it would raise its prices by 1% in order to offset a PS67-million increase in their pay bill. This was also impacted by the rising national living wage.
In the Sunday Times Machin called many of Rachel Reeves’s announcements last month “commendable”, but said that she had “failed” to address the impact of the Budget in the here and now. “At its core, it remains a contradiction. Long-term growth goals are laudable but are at risk of being only that, unless action is undertaken to encourage growth today.”
He added: “If government wants to invest for the future, it should put easing the burden the Budget placed on the retail sector at the top of the list of immediate actions.”
Machin stated that the change to the NICs would be the most detrimental to part-time workers. He also said that the Employment Rights Bill would force him to “reject a colleague who usually works weekends and requests additional shifts”.
He said that phasing out the change in the NIC threshold will give retailers “breathing room to manage the rise in the national minimum wage – which I view as a good expense”.
He concluded by saying that M&S is “all about the truth”, putting the difficult issues on the table, and admitting to when we have to change our decision. The government should do the same. It will be respected if they show leadership and are honest. Machin said that the chancellor should act immediately.
Machin called on the government also to delay “extended producer responsibilities” fees related to recycling, rethinking business rates and “co-creating” a strategic plan focused on increasing British food production.
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