The chief executive of Marks and Spencer has repeated a call on the government to phase in the increase to employers’ national insurance contributions announced in October’s Budget.
Stuart Machin said he “wholeheartedly supports” an amendment to the legislation, tabled by Lord Simon Wolfson.
The Conservative peer and chief executive of rival retailer Next has suggested phasing the timing of the NICs threshold decrease over two years to help employers manage its impact.
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Chancellor Rachel Reeves announced in October that, as well as increasing employers’ NICs from 13.2% to 15% from April 2025, the “secondary threshold” at which employers begin paying the tax would reduce from £9,100 to £5,000 per year.
Next has said it will raise prices by 1% this year to alleviate a £67 million increase in its pay bill, which has also been affected by the rise in the national living wage.
Writing in the Sunday Times, Machin described many of the announcements in Rachel Reeves’s speech last month as “commendable” but he said she “failed to address the significant impact of the Budget on the here and now, and at its heart remains a contradiction: long-term growth ambitions are laudable, but they are at risk of remaining only that unless action is taken to encourage growth today”.
He continued: “If the government wants to invest in the future, then lightening the burden that the Budget loaded onto the retail sector should be at the top of its immediate action list.”
Machin said the changes to the NICs threshold would hit part-time workers hardest, and said that proposals in the Employment Rights Bill mean “we would have to say no to a colleague usually working weekend hours who requests more shifts”.
He said phasing in the change to the NIC threshold would give retailers some “breathing space to manage the increase in the national living wage – which I see as a good cost”.
Concluding, he said that at M&S “we talk about the unvarnished truth” – getting the thorny issues on the table and admitting when we need to change a decision… The government must do the same and it will be respected for its strength of leadership and honesty if it does. The chancellor must act now,” said Machin.
Machin also called on the government to delay the “extended producer responsibility” fees relating to recycling, to rethink business rates, and to “co-create” a strategy focused on growing British food production.
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