Marketing Newscast

(Edited 10 February 2025)

UK retailers are being "raided like a piggy bank" by the Government, Marks & Spencer CEO Stuart Machin wrote in yesterday’s Sunday Times, citing the huge costs levied on the sector by the Chancellor’s hike to Employer National Insurance Contributions (NICs), and a new packaging levy that the British Retail Consortium estimates will cost the sector £2bn, 20 times more than the current amount retailers pay. This, Machin said is money that will go “straight to the Treasury as general taxation” with “no improvement to recycling". Machin said that while some of Rachel Reeves’ Budget was "commendable", namely the focus on long-term planning and attempts to boost investment in infrastructure, if the Government wanted to boost growth quickly, then "lightening the burden that the Budget loaded onto the retail sector" should be a priority, he said. A Treasury spokesperson said: "We delivered a once-in-a-Parliament budget to wipe the slate clean and deliver the stability businesses need, laying the foundations for economic growth. In addition to capping corporation tax for the duration of parliament, we're permanently cutting business rates for retail, hospitality and leisure on the high street from 2026".

The brewing industry is also warning that the new packaging levy could kill off the beer bottle. The British Beer and Pub Association (BBPA) says the introduction of the new Extended Producer Responsibility (EPR) scheme, scheduled to come into effect on 1^st April, is effectively a “glass Tax” that will increase packaging costs by up to 7p per 500ml bottle, a not insignificant amount given that brewers make just 3p profit on average from every half litre bottle sold, according to the BBPA. It is also a poorly thought out, confusing and badly designed scheme, it is claimed, because the levy is based on weight. The British Glass Association says it believes fees will be around 49 times higher for glass than for other, less recyclable materials. Duncan Sambrook, founder of Sambrook’s Brewery, tells The Telegraph: “This is not an environmental scheme from the Government, it is a tax.” The Wine and Spirit Trade Association (WSTA) says the EPR will also affect their trade, and that shoppers can expect to pay 18p more for a bottle of spirits and 12p more for a bottle of wine as a result of it. This body accused the Government of a “double whammy tax grab;” new alcohol taxes based on alcohol by volume (ABV) came into force on 1^st February, adding 32p to the duty on a bottle of gin and 54p on many wines. The Government hopes to raise £1bn through the EPR scheme.

Britain’s “increasingly complex” tax system is costing businesses £15.4bn a year just to comply with, a report by the public spending watchdog the National Audit Office (NAO) concludes. Companies are paying at least £6.6bn per year on accountants, £4.3bn on internal administrative staff and £4.5bn on software and postage to satisfy the demands of increasingly difficult tax rules, the NAO says, and that the “significant” cost to businesses was rarely considered when making decisions about tax. The report also raised concerns about the rapidly rising cost of running the tax office itself: HMRC spending has risen by more than half a billion pounds since 2020, with an extra £100m spent on staff. However, the NAO notes this extra spending has not led to better outcomes; investment in digitising tax has been “mixed” at best and HMRC has found it “difficult to achieve efficiencies through its customer service provision,” it found. Last week, the Bank of England blamed in part the increased size of the state for Britain’s lack of productivity, and last month the House of Commons’ Treasury Select Committee warned that Chancellor Rachel Reeves’ new Office for Value of Money, which is intended to reduce wasteful spending, itself risked being a waste of taxpayer funds. An HMRC spokesman said: “It costs us just half a penny to collect every pound of tax revenue, with the NAO recognising our compliance work provides good value for money. We’re already improving and modernising the tax system to deliver the services our customers expect and slash red tape for business, and ongoing investment in our digital services will be vital to closing the tax gap yet further.”

Chancellor Rachel Reeves is meeting banking bosses at Barclays, Lloyds Banking Group, NatWest and Nationwide this week, according to Sky News’ City Editor Mark Kleinman, in what is believed to be her latest salvo to various business sectors as her growth strategy falters. Last week, the Bank of England halved its growth forecasts for the UK economy and increased its inflation predictions, saying it will rise to a peak of 3.7% in the third quarter of this year, having previously predicted a risk to only 2.8%.

Nearly 4,000 migrants working illegally in nail bars, car washes and restaurants have been arrested since Labour took power on July 5^th last year. 3,930 arrests were made between then and 31^st January, in 5,424 visits by immigration enforcement officers, a 38% increase compared to the previous 12-month period. Home secretary Yvette Cooper said the government is boosting enforcement to “record levels”. “The immigration rules must be respected and enforced. For far too long, employers have been able to take on and exploit illegal migrants and too many people have been able to arrive and work illegally with no enforcement action ever taken,” she said. “Not only does this create a dangerous draw for people to risk their lives by crossing the Channel in a small boat, but it results in the abuse of vulnerable people, the immigration system and our economy.”

The number of permanent vacancies in the UK dropped for the 15th month in a row in January and at the fastest pace since August 2020, a new report from KPMG and the Recruitment and Employment Confederation (REC) reveals. REC CEO Neil Carberry said: “An autumn of fiscal gloom, difficulty navigating significant upcoming tax rises and little progress on the practicalities of a costly new approach to employment rights are all acting as brakes on progress”. Jon Holt, CEO of KPMG, said: “Businesses continue to hold back on recruitment, leading to permanent and temporary placements falling steeply again in January. It is unlikely that we will see any significant improvements in the survey data over the near term, as hiring stays muted and staff availability continues to rise.”

Lloyds Banking Group is reviewing thousands of jobs in its IT division as part of a transformation strategy aims to create a “highly skilled workforce” positioned to lead its push into digital banking, City AM reports. The FTSE 100 bank told some 6,000 technical and engineering staff on Wednesday that their jobs may be at risk of redundancy following the review, which is scheduled to take around four weeks. However, the plan is expected to bolster the overall headcount of the team by around 1,200 and will “supercharge” in-house technology and engineering expertise, a spokesperson for Lloyds said.

Shein has ditched plans to open a UK warehouse ahead of its planned London stock market listing. The Chinese fast fashion company was looking at sites in the Midlands but now says it has “no plans” to open a warehouse in Britain. Shein’s listing is looking less and less likely as its bottom line looks set to diminish: the EU has threatened to crackdown on its business model; the US Postal Service (USPS) has stopped accepting parcels from mainland China and Hong Kong until further notice; and here in the UK the Financial Conduct Authority is under pressure to prevent the listing amid criticism from MPs and human rights’ activists about the use of slave labour in its supply chain.

The Spectator has made a loss for the first time in more than a decade. The magazine, which was sold initially to RedbirdIMI and then to hedge fund manager and media baron Sir Paul Marshall, posted a pre-tax loss of £6.8m for 2023 – before Marshall’s ownership - according to accounts filed with Companies House. In its last full year of ownership by the Barclay family, The Spectator made a pre-tax profit of £2.6m. Marshall acquired it in September 2024 for £100m. The accounts show the hefty losses include £6.4m in costs incurred during 2023 related to payments to receivers, independent directors, bankers, lawyers, and consultants, as well as employees. The magazine last reported a loss in 2012, of £570,000 loss it reported in 2012.

FTSE 100 insurance giant Legal & General is preparing to kick off a search for a successor to Sir John Kingman, its chairman since 2016 and one of the City’s most prominent figures, Sky News’ Mark Kleinman writes, saying he is told Sir John is likely to step down at the company’s 2026 annual general meeting.

Donald Trump has announced a 25% import tax on all steel and aluminium entering the US. The US President also promised an announcement later in the week about reciprocal tariffs on all countries that tax imports from the US, saying: "If they charge us, we charge them". This latest salvo in his trade war will again hit Canada and Mexico hard; the two are among the US's biggest steel trading partners, and Canada is the biggest supplier of aluminium into the US. He was accused immediately by Doug Ford, the premier of the province of Ontario, where Canada's steel production is concentrated, of "shifting goalposts and constant chaos, putting our economy at risk". Last week, Trump threatened to impose import duties of 25% on Canadian and Mexican products but delayed that plan for 30 days after the two countries agreed to his requests to beef up security on their borders with the US to prevent illegal immigration and drug trafficking. The Australian Prime Minister Anthony Albanese responded by saying his government will "make the case" for Australia to be exempted from any steel and aluminium tariffs, something they got during Trump's first term. French foreign minister Jean-Noel Barrot, however, said the EU should not hesitate to defend its interest and that “the time has come” for the bloc to push the trigger on retaliatory measures. Meanwhile, China's tit-for-tat import taxes on some American goods came into effect this morning. These include a 15% border tax on imports of US coal and liquefied natural gas products. There is also a 10% tariff on American crude oil, agricultural machinery and large-engine cars.