They warned that supermarket prices could rise.
Andy Burnham has been issued a major warning by M&S and Tesco (Image: Getty)
Marks and Spencer, Tesco and Asda have warned Andy Burnham of surging supermarkets prices and falling youth employment if they fall victim to a budget tax raid. The Retail Jobs Alliance (RJA), a coalition of food and merchandise chains that employ nearly 1 million people in the UK, issued the cost-of-living warning in a letter to the Prime Minister last week.
While the retailers welcomed business rates relief for pubs, clubs and live music venues, they feared Labour will force them to plug the gap when John Healey confirms the upcoming budget in October. “Retail stores are integral to high street renaissance but they cannot continue investing in communities if they face an ever-increasing tax burden,” it said.
They worried that John Healey would increase the higher business rates multiplier from the existing 50.8p level, which was set by his predecessor Rachel Reeves last November.
Warning that last year’s autumn budget imposed £7billion in extra costs and taxes on the sector, they stressed that further increases for shops with a rateable value above £500,000 would impact their ability to keep prices down for shoppers.
They said: “This additional burden – with business rates a significant element – is a direct cost driver on prices, and further increases would place even greater pressure on retailers’ ability to support customers through competitive pricing and cost of living initiatives, while continuing to offer employment opportunities in communities across the country,” reports Sky News.
Keeping business rates unchanged would also protect youth employment, according to the members, which includes Morrisons, Primark, B&Q-owner Kingfisher and Sainsbury’s, since higher rates would impact their ability to invest.
“Approximately 4,000 stores over the £500,000 threshold employ one in three retail workers. Any further increases to the multiplier would severely impact investment, employment and the viability of these anchor stores across the country.”
The letter was also signed by Usdaw, the fifth-biggest trade union in Britain with 370,000 members, and one of Labour’s biggest financial backers.
The RJA members said the high street was a “single ecosystem” that would suffer collectively if rates were cut for the hospitality sector but increased for retailers.