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A growing list of British companies have warned of rising costs to consumers in the wake of Labour’s Budget.
The boss of Marks & Spencer said the retailer will take a £60 million hit from an increase in taxes on employers, adding that the company will do “everything we can” to avoid passing on costs to consumers.
However, Stuart Machin admitted he cannot rule out price rises as a result, with an increase in the national minimum wage also adding to M&S’s costs.
Meanwhile, housebuilder Persimmon said it is “seeing signs” of increases to building costs for 2025, in part pushed up by the tax rises.
“We are seeking to mitigate the impact of these cost increases through robust commercial controls and other management actions,” it said.
Chancellor Rachel Reeves presented her first Budget last week, which, she said, met the Government’s promise not to increase taxes for “working people”.
But she introduced £40 billion a year in extra taxes to put more money into schools, hospitals, transport and houses.
This included increasing the rate of employer national insurance from April next year, while also lowering the threshold at which companies start paying the tax, designed to raise £25.7 billion by 2029/30.
Pubs and restaurant chains have been vocal about the tax increases over the last week, with Wetherspoon chief Tim Martin saying he believes “all hospitality businesses” are planning to pass on higher costs through price rises.
He said on Wednesday: “Cost inflation, which had jumped to elevated levels in 2022, slowly abated in the following two years, but has now jumped substantially again following the Budget.”
Last week, Chris Jowsey, chief executive of Admiral Taverns, which has more than 1,420 pubs across the UK, said the measures will cost the sector “significantly”.
He pointed to a cut from 75% to 40% in the relief given to pubs on business rates, a tax on businesses which operate physically. Labour has said an overhaul of the system will take place in 2026/27.
It comes after the boss of Primark’s parent company said on Tuesday that he feels “the weight of tax rises” in the Budget is falling on the UK high street, as he said the company’s national insurance bill will rise by “tens of millions” of pounds.
George Weston, chief executive of Associated British Foods, which also owns food and sugar brands, said the business is preparing for a big jump in costs.
Elsewhere, billionaire inventor Sir James Dyson took a swipe at new inheritance tax measures which he said will “kill off homegrown family businesses”.
He was responding partly to Labour’s decision to raise a tax of 20% on the value of inherited farming assets above £1 million.