Tesco and M&S warn Burnham against Budget tax raid on retailers

Leading supermarkets Tesco, Sainsbury's, and Marks & Spencer have warned Prime Minister Andy Burnham against implementing a tax hike on retailers, stating they are already grappling with "unsustainable" costs. The Retail Jobs Alliance (RJA), representing over a million retail employees, has urged Burnham not to prioritize pubs and bars over high street retailers.

Burnham has pledged to ease the business rates burden for pubs, bars, and live music venues, but this has raised concerns about potential hikes for larger retailers to balance the budget. The letter to Burnham, obtained by City AM, cautions against increasing the business rates multiplier for stores with a rateable value over £500,000.

Retailers argue that footfall for hospitality businesses would decline significantly if business rates hikes force them off the high street. They claim that the high street functions as a single ecosystem, with retailers, pubs, restaurants, and other local businesses all relying on vibrant town centres and consumer spending. Increasing business rates for retailers could weaken this ecosystem.

Retailers also point out that retail is the most-taxed sector in the UK relative to its economic output, paying 21% of all business rates despite accounting for only 5% of GDP. The £7 billion added to retail's cost burden last year is a direct driver of higher prices. The RJA, backed by Usdaw, the UK's fifth-largest trade union, urges Burnham to exempt all brick-and-mortar retailers from the highest business rates multiplier of 50.8p to support his pledge to grow businesses in every postcode and safeguard retail employment nationwide.