LONDON (Reuters) – Britain’s tax raising budget shows the government does not understand business and it will drive prices higher, restrict pay and curtail investment, one of the country’s most experienced retail veterans said on Thursday.
Criticism of finance minister Rachel Reeves’ Oct. 30 budget has been intense, particularly from business after she tapped companies for an additional 25 billion pounds ($32 billion) of taxes a year to rebuild public services. Multiple surveys have shown corporate confidence taking a hit.
Stuart Rose, one of Britain’s best known business figures and the former chairman of retailers Asda, Ocado and Marks & Spencer, added his voice on Thursday, telling LBC radio: “I don’t think government understands business is the real truth.”
He said Reeves had engaged with business prior to July’s national election but was “listening with tin ears”.
“Across the nation now, people will be looking and saying ‘ouch’,” said Rose, who stepped down as Asda chair on Saturday.
As well as predicting price rises and restricted pay increases for workers, he is worried about the impact of the budget on investment.
“People will not invest or they’ll be very circumspect about investing. We must invest, if we don’t invest we don’t grow, if we don’t grow, we die,” he said.
Rose added that while he understood why the government had imposed inheritance tax on agricultural land, to prevent people from buying it to protect their wealth, he joined smaller farmers in warning that it could disrupt the food supply.
“We’re constantly saying ‘oh we must wean ourselves off importing foodstuffs from abroad’ and yet at the same time we’re trying to shoot ourselves in the foot with a policy that may not be very helpful,” he said.
($1 = 0.7903 pounds)
(Reporting by James Davey; Editing by Kate Holton)