Stuart Machin, CEO M&S said:

Our Chairman once likened my job of transforming M&S to competing in an egg & spoon race. You must go fast enough to be in with a chance of winning, but tread carefully enough so you don’t drop the egg. Our Chancellor now faces a similar challenge as he holds a fragile UK economy on his metaphorical spoon. 

Indeed, whilst January’s bounce in GDP growth may have signalled the first glimmers of recovery, no one can deny the vulnerability of UK economy.  Britain is the only G7 economy forecast to shrink in 2023, meaning the UK is now less productive than the US, Germany and France. And last year saw the highest number of businesses go bust in 13 years and retail vacancy rates remain higher than they were before the Covid-19 pandemic.

In this context, we absolutely support the Government’s focus on balancing the books, reasserting its economic competency, and giving the markets, businesses and consumers, the stability they want and need. 

We must recognise its recent success with the Windsor Framework; this is a big step forward for the people of Northern Ireland and the UK businesses serving them. However, the challenge remains for companies trading with the Republic of Ireland and wider EU, with the added complexity and cost of different labelling requirements. They have shown progress is possible; now UK Government and EU should work together to break down the barriers to trade that still exist, with an approach that takes into account the safety and high standards in UK and EU food – such as an equivalence agreement. 

Government action in the Autumn Statement to address the untenable rise in business rates by freezing the multiplier and ending downwards transition, was also welcome.  As too was its decision to drop the short-sighted proposal for an online sales tax. Yet there is still work to do here. Retail contributes over a quarter of rates collected despite generating only 5.2% of GVA. The Government should take decisive, practical action and reduce the multiplier back to its original 1990 level of 35p for all ratepayers.

However, we cannot cut our way to growth. The positive action I’ve called out, has come about from a Government listening and responding to the evidence and reality of the commercial world. Indeed, many of our issues could be brought together and tackled in an effective industrial strategy. The previous Government published a strategy back in 2017 which was a good start, but we would like to see Government to work with business to bring forward a renewed, and championed, industrial strategy. 

More specifically, we want to see decisive, practical action in three key areas – skills, net zero and regulation – if we are going to build a growing, enterprising economy again.

In the case of skills, UK policy is not fit for purpose, and I take heart from the Prime Minister suggestion of a new emphasis here. But talk needs to become action, with renewed focus on lifelong learning and on the skills that we need to build a modern economy. There is a real issue – and opportunity – in mass upskilling of (in our case) retail workers in digital skills.  We know it makes a difference – and our pilot in ‘essential digital skills’ course for 800 store colleagues led to a 15pt increase in digital confidence. 

A good first step would be to re-scope the Apprenticeship Levy into a broader skills fund so businesses have ‘credits’ you can draw down and spend as you wish within the boundaries of parameters set by Government. In the current regime, we can only make use of c.34% of our annual £5.4m contribution to the Levy but in entrusting the expertise of employers to decide how it’s spent – we could grow digital skills training but also get people into the labour market – something we know is a Government focus. 

While UK Government is leading on regulation around carbon reporting it isn’t in terms of the investment in infrastructure required to deliver net zero. We support the Skidmore Review recommendations that Government should roll out charging points for e-vehicles, including HGVs and develop on-shore recycling for key materials, including textiles. 

What would step-change progress is to really incentivise investment in this area. To this end, the capital allowances super deduction – due to end in little over two weeks - should be extended specifically for capital expenditure on energy efficient investments. By making investment in energy efficiency more attractive than other areas this will focus business minds on one of the biggest challenges of the day. 

Finally, we would ask for no further legislative burden acting as a drag on business from unnecessary taxes or regulation. In my 30-year career, I have never known the burden on retail sit as heavy as it does today. There needs to be a strategic overview of legislation and its implementation; with a view to pausing new regulations that will add cost to an under pressure sector. 

This year, as well as ongoing divergence with the EU, we are having to contend with widespread changes like the HFSS location restrictions and various Deposit Return Schemes (DRS) across the UK. Defra is also consulting on further initiatives such as restrictions on single use plastic and new burdensome reporting requirements.  On many of these policy areas we share the Government’s ambition for much-needed change, however, when you put them together, they risk being over-whelming and unproductive - creating an unsustainable ask. 

So as we look ahead to Wednesday, we’re looking for a balanced budget for business that helps put UK economy back into the race.