Tesco boss “drastic” Dave Lewis has taken issue with the Government on everything from the National Living Wage to soaring business rates and the paltry tax bills of digital rivals in a speech to the so-called bosses’ union, the CBI.
Lewis used his inaugural address to the CBI conference to air concerns that are widely held among his peers and rivals.
Adding his voice to that of Sainsbury’s boss Mike Coupe, the Tesco chief demanded reform of business rates as a condition for implementing the government’s National Living Wage.
The National Living Wage, the apprenticeship levy already announced by the government and a failure to reform business rates could produce a perfect, and devastating, tax storm, he said.
Conceding that business rates are “complex”, he nevertheless went on to dish out the plain facts: “Over last five years property values have fallen, profits are down but business rates are up. Quietly but dramatically.
“Business rates have hit £8bn for retail. That’s over a quarter of the bill and significantly more than any other sector. That’s an enormous pressure. Shops have closed. Businesses lost. Jobs sacrificed.”
Lewis went on to claim that Tesco’s business rates bill has increased by well over 35% in the last five years, adding: “It’s the biggest tax we pay and it is now three times OECD average. For every £1 we pay in corporation tax large UK retailers pay £2.31 in rates. It’s unsustainable and needs urgent reform.”
He also took issue with the rise of the likes of Amazon, who he said, “have no real community footprint, far fewer employees, and a far lower tax contribution”.
Lewis added: “That should be a dilemma for the Exchequer. Without rebalancing to reflect digital business models, the physical side of retail pays a higher and higher proportion of the total tax bill. Furthermore it will incentivise a swifter shift to infrastructure light, low employment business with little interaction with communities.”
He concluded: “[We need] a new way of working for a rapidly changing world. A new way to solve more of the problems people want us to solve, more quickly and at lower cost to taxpayers.
“That’s good for business. Good for Government. And, given the wider economic importance of retail, good for people in Britain as a whole.”
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