The chairman of Marks & Spencer has delivered a stark assessment of Britain’s business climate, warning that excessive regulation and rising tax costs are making it increasingly difficult for companies to invest and expand.
Archie Norman used the retailer’s latest annual report to argue that the environment facing businesses has become one of the least supportive of growth seen during his time with the company.
“There has rarely in the history of M&S been a time where the regulatory environment has been less friendly to growth and investment and our tax burden increased substantially in the year,” he wrote.
Despite the challenges, Mr Norman said Marks & Spencer would continue to press ahead, though he suggested many smaller firms may struggle to absorb the same pressures.
He also warned that current policies were contributing to the ongoing deterioration of high streets and town centres across the country.
Why is Archie Norman warning about UK growth?
The veteran retailer pointed to a combination of regulatory demands and higher costs facing employers.
His comments add to growing concern among business leaders, particularly in the retail sector, about the direction of government policy and its impact on investment, recruitment and economic expansion.
Mr Norman said M&S would “sail into the wind and ride the waves” despite the tougher conditions.
However, he cautioned that many competitors did not have the same scale or resilience to withstand rising burdens.
What are other business leaders saying?
The concerns were echoed by David McDowall, chief executive of pub giant Stonegate, who linked recent increases in youth unemployment to government decisions affecting employers, reports the Telegraph.
Writing on LinkedIn, he said: “If the Government is serious about reversing this rise in youth unemployment, it must first review its own policy decisions. We don’t lack the desire to hire young people; we lack the economic breathing room to do so.”
Mr McDowall described the figures as “a stark reminder of what happens when government policy actively penalises this job creation”.
Why are businesses clashing with the Government?
The latest intervention follows a series of public criticisms from prominent business figures.
Last week, Lord Wolfson of Aspley Guise, chief executive of Next, argued the Government had its “foot on the brake” when it came to economic growth.
He also claimed Labour’s Employment Rights Act was contributing to a “dramatic fall” in entry-level job opportunities.
Meanwhile, Currys chief executive Alex Baldock warned last year that the planned workers’ rights reforms risked reducing the availability of part-time jobs.
Mr Norman has previously criticised the measures, describing them as “a political indulgence that the country cannot afford”.
What has frustrated business leaders?
Employment reforms are not the only source of tension between company bosses and ministers.
In March, Asda chairman Allan Leighton said the Government had “zero credibility” following claims that petrol retailers were profiteering during fuel market disruption linked to the conflict involving Iran.
Many senior figures in the business community had backed Labour before the 2024 General Election, hoping the party would pursue a more growth-focused agenda.
However, companies have since faced a series of additional costs, including higher National Insurance contributions for employers and above-inflation increases to the minimum wage.
Business leaders have increasingly questioned whether those measures are helping or hindering economic growth, with several of Britain’s biggest employers now publicly voicing their concerns.