Retail’s election wish list: what the bosses of Ikea, AO and more want from a new government

Peter Jelkeby, chief executive and chief sustainability officer, Ikea UK & Ireland

The key retail priority for any new government should be to deliver political and economic stability with a clear vision for the future. Investing in the retail sector drives growth, creates well-paid, skilled, and productive jobs, and helps to shape the UK’s future – through the adoption of digital technology, or driving and delivering the UK’s net-zero ambitions.

For this to happen, we need a better approach when it comes to the coordination of policy, regulation, taxation and alignment across the UK’s nations – recognising these can enable and unlock growth and transformation if done well. We need a fresh approach to business rates (which enables offline and online retail), we need investment into our high streets, and we need to better protect our co-workers and customers from retail crime. Embracing sustainability encouraging investment into infrastructure and technical innovation supporting a circular economy will create jobs, opportunities, and a better community for all. 

With our fundamental passion for home, we also recognise the housing challenges facing wider society and along with our partner Shelter, we want to see a new government commit to building 90,000 social rent homes a year by 2030.

Lyssa McGowan, chief executive, Pets at Home

The biggest thing that we want the government to do, and I think this is where the Competition and Markets Authority investigation can help us, is to open the Veterinary Surgeons Act.

The legislation and primary legislation that governs the veterinary sector was written in 1966 and hasn’t been touched since. It was a very different world. England just won the World Cup the last time we looked at the act.

I think our primary call is for that to be opened and the legislation to be made much more fit for purpose for a modern veterinary sector.

Nick Collard, chief executive, Bensons for Beds 

Retail is a major private employer in the UK but the current apprenticeship levy is too restrictive for the industry’s evolving needs. As a major UK manufacturer with craft skills at the heart of our business, we recognise the value of apprenticeships. They offer an excellent pathway for young adults to enter the workforce, help existing staff develop new skills and support those returning to work after a break. 

The industry needs to attract more talent by creating inspirational jobs with clear progression plans and better pay. With business costs surpassing retail sales growth, it’s concerning that retailers can’t access essential training funds they’ve contributed to. 

Additionally, high business rates are a significant burden on the retail sector, exacerbating financial pressures. Reducing these rates would alleviate some of the strain, allowing retailers to invest more in their workforce and infrastructure. Lower business rates would enable retailers to allocate more resources toward creating jobs, enhancing training programs and improving customer experiences. This reduction is essential for the sector’s sustainability and competitiveness.

A more flexible apprenticeship levy, combined with reduced business rates, would empower employers to offer comprehensive programs, including pre-employment training like digital literacy, strengthening the retail workforce and helping to rebuild the British economy.

John Roberts, founder and chief executive, AO

If the next government wants to help businesses and support young people in the UK, they need to reform the apprenticeship levy urgently. When it first appeared, it was a beacon of hope. But it’s so badly designed that since it launched in 2016, over £4bn of potential funding has been returned to the government. A scandalous waste of money and opportunity. 

Reform the levy, get the right people and organisations involved in the solution – like AO, M&S, Tesco and Timpson – who know what they’re doing and are standing by, ready to create opportunities to transform young people’s futures. Government is a brilliant funder but not an operator or innovator.

Gavin Peck, chief executive, The Works

In what continues to be an uncertain operating environment, confirmation of a general election in the early summer is a step towards some much-needed clarity and consistency for businesses.  

We echo the BRC’s concerns that the latest business rates rise, which came into effect in April, compounds existing cost pressures on businesses, making it more difficult for retailers to deliver value for customers at such a critical time for the economy. Along with other retailers, we have repeatedly expressed that we would like to see a reduction in business rates to offset the economic headwinds we are facing and to address the fact that the business rates system is an unbalanced method of raising taxes and is out of touch with property values.  

We hope that all parties will take these factors into consideration as they make the case for business over the campaign.

David Wood, chief executive, Wickes

Britain’s housing stock is the oldest and most energy-inefficient in Europe. With energy costs front of mind for customers, I would urge the government to remove VAT from all energy-saving materials such as loft insulation.

By making it more affordable for people to properly insulate their homes homeowners would benefit from lower bills and it would have a positive impact on the environment, helping the country meet its net-zero target.

Emily Kraftman, managing director UK and Europe, Who Gives A Crap

The UK is one of the 10 richest countries on earth and yet 6% of people here live with hygiene poverty. That is not right. We would like to see all the UK political parties promise to urgently reduce the number of people living without access to water, sanitation or hygiene in Britain as an urgent priority in the next parliament. 

A quick, simple way this could be done is by scrapping the ‘roll tax’ – VAT that is unfairly charged on toilet roll. This regressive tax suggests the state views loo roll as a luxury, while items like helicopters, caviar and chocolate marshmallows are VAT-free and therefore, by the same logic, essential items. 

There are many competing demands for public spending but this move is comparably affordable. According to our economic modeling, the total cost to the Exchequer of zero-rating toilet paper is £247m, just 0.024% of 2023’s tax receipts, while it costs just under £9 per person per year in taxes. We should not underestimate the impact this saving could have as the cost-of-living crisis continues. 

We’re calling on whoever forms the next government to act quickly and ensure everyone can afford essential hygiene products. In return, we commit to passing that saving on to the customer. Let’s start simple with economic pledges. Scrap the roll tax. 

Theo Paphitis, owner and chair, Ryman, Robert Dyas, Boux Avenue and London Graphic Centre

We’ve been hearing a lot from the Labour Party about their plans for retail and the high street. Most of it is common-sense stuff that would provide a lifeline to the retail sector, although we’ve yet to see the detail. The problem is, I’ve heard it all before. Many promises in the lead-up to power, then zilch once they’ve got the keys. Fingers crossed this isn’t the case this time. 

As for the Conservatives, they promised to carry out a fundamental review of the business rates system in 2019, which led to absolutely nothing. Let’s pray that this is not the same again if they form the next government.

The role of government, in theory anyway, is to set the conditions for businesses to thrive and encourage investment and growth. Unfortunately, the reality is that hare-brained and destructive government policies pose the most significant challenges for the high street. At the very least, the next government can start by reforming these policies.

For starters, they can help reform the unfair and archaic business rates taxation system. How can a tax from the 1500s still be fit for purpose today? By reforming this outdated system, the Treasury can spread the taxation burden more fairly between the physical and online players whilst getting more money in their coffers. Seems like a no-brainer to me.

They can also reform the broken apprenticeship levy. How is retail meant to recruit and train the industry leaders of tomorrow when the levy we pay to train them is so broken that we’ve seen half of retail’s £250m contribution go unspent? If the government reformed it and made it more flexible, more money could be spent on hiring, training and retaining staff.

Thierry Garnier, chief executive, Kingfisher

We have four longstanding priorities where we would like to see further action from the government.

First, improving the energy efficiency of UK homes, which are some of the least energy-efficient in Europe. The country needs a long-term policy that supports and incentivises consumer retrofit projects, giving the industry confidence to scale up and invest for decades to come.

Second, fundamental reform of business rates. Business rates are a broken and outdated system, meaning retailers shoulder a disproportionate tax burden compared to other sectors. For many retail stores, business rates are now more expensive than the lease paid itself. That holds us back from doing what we do best – investing in local communities and creating quality jobs all around the country.

Third, addressing the growing shortage of tradespeople, which Kingfisher’s research last year found is set to cost the UK £98bn in missed economic growth to 2030. That means supporting more young people to go into trade careers, particularly women who remain hugely underrepresented, by investing in skills and supporting SMEs to take on many more apprentices.

Finally, a concerted effort to increase housebuilding, including social housing. The UK urgently needs more homes to meet demand and make housing more affordable.

Scott Parsons, chief operating officer UK, Unibail-Rodamco-Westfield

This election is an exciting moment for the country and a chance to reframe how business and government work together to deliver for communities.

We particularly welcome Labour’s pledge to overhaul business rates with a new system of business property taxation. This is an opportunity to lift the increasing financial pressure on retailers in high streets and shopping centres.

We look forward to engaging with Labour as they develop concrete plans to address and deliver the unfair burden on physical retail compared to online counterparts. 

Henrietta Rix, co-founder and chief executive, Rixo

As a retail business, we are hopeful that the government will prioritise policies that support the growth and sustainability of the retail sector.

This includes initiatives such as bringing down business rates for retail stores, and reducing taxes and duties for trading with Europe.

The challenges posed by Brexit have undoubtedly impacted trade, and addressing these issues is crucial for ensuring a thriving and competitive business environment for Rixo.

Dee Corsi, chief executive, New West End Company

As the election nears, ‘growth’ has emerged as a buzzword for both Labour and the Conservatives. But if either party is truly serious about delivering growth for retail, they are going to have to be realistic about the scale of challenges facing the sector.

An unwieldy business rates system has left larger retail businesses – who together employ hundreds of thousands of workers nationwide – with an outsized tax burden, which acts as a barrier to growth and investment into our high streets. It is a thorny issue to untangle, but any attempts to shift the bill to online businesses will be at odds with the reality of today’s multichannel retailer. What’s clear is that the solution must be developed in close consultation with retailers, big and small, so that any reform works in practice and is not yet another sticking plaster.

National increases in retail crime have also contributed to a challenging trading environment, and we have welcomed the commitments from both parties to take a tougher stance on crime. We now need to see the funding unlocked to make that a reality, with local policing given the resources they require to ensure that the public – and businesses – feel safe and secure.

And, last but not least, the tourist tax has British businesses trading at a disadvantage while France and Italy reap the benefits of soaring tourist spend. Businesses across the country have been clear: reversing the tourist tax would have a material impact on their bottom lines and help restore the UK’s competitive edge. It is a rare, golden opportunity for any incoming government to get retailers on side from day one.