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The outgoing boss of John Lewis has described changes to Employers’ National Insurance and the lack of early reforms to business rates in last month’s Budget as a “two-handed grab” from UK businesses.
Nish Kankiwala, who is nearing the end of his two-year stint as chief executive of the department store chain and Waitrose, said the group faces “tens of millions” of extra spending from next year after the Budget.
John Lewis was surprised by some of the measures announced by Chancellor Rachel Reeves, such as the lower income threshold at which businesses start paying NI contributions, although he acknowledged the government faced difficult decisions, Kankiwala said. said
Businesses were frustrated by changes to NI and the National Wage, and the failure to deliver meaningful reforms that would reduce the gap between rates paid by high street retailers and online companies such as Amazon.
Kankiwala was the latest business leader to bemoan the impact of the budget, as he said the government should look at a “fundamental change in business rates” because “it seems to be increasing for us, as Our people have expenses.”
“It seems, you know, kind of [a] To hold with two hands, and it is useless.”
The lack of urgent business rates reform comes despite a promise in Labour’s manifesto to “level the playing field between the high street and online giants”.
Instead Reeves announced plans that would add additional costs to businesses, including raising NI for employers by 1.2 percentage points to 15% from April, as part of a £40bn funding package. To close the gap.
It prompted the British Retail Consortium to warn of £7bn a year in losses for these businesses, which would cost jobs and raise prices for consumers. The industry body added that business rates will cost retailers an extra £140mn a year after April next year, although relief is available for the 250,000 premises that typically house small businesses.
Kankiwala, who will remain an adviser to John Lewis, joining as a non-executive director in 2021, told the Financial Times: “If they can delay national insurance. [changes]But also if they could make a change based primarily on business rates, I think that would make a huge difference. Not just for small and medium enterprises, but I think for retail in general. It is very important.”
Business rates are calculated based on property value, hitting John Lewis and its rivals who often have stores in more expensive locations, unlike out-of-town business parks, where many warehouses operate. .
Kankiwala, who became the first chief executive of the partnership in March last year to turn around the business, John Louis and Waitrose will try to minimize the impact on prices and customers.
“The last thing we need is a resurgence of inflation, because we’ve just got it under control, and inflation is not good for anybody. . . . We will try and control it. [pricing] As much as possible,” he said.
He insisted that the John Lewis partnership “will see no change in terms of our strategy and investment or our future growth” despite facing higher costs.
The partnership posted its first annual profit this year, after three consecutive years of losses in which it suffered as a result of fierce competition on the high street and online, rising inflation and store closures during the pandemic.
In response to criticism from major employers over the budget changes, the Treasury previously told the FT that the government would have to “make tough choices to fix the country’s foundations and deliver the much-needed economic stability to allow businesses to thrive.” must be restored”.
