The boss of B&Q-owner Kingfisher has warned John Healey that the FTSE 100 firm may have to pull its support for unemployed young people if the Chancellor hikes taxes.
Thierry Garnier, the retail group’s chief executive, wrote in City AM that the Chancellor must exempt shops from the highest bracket of business rates at the Budget later this month or risk plunging more young people into unemployment.
Garnier said retailers, who are among the highest employers of young people in the country, want to tackle the Neets crisis but will not be able to if their costs keep rising.
“We share the Government’s concerns about the number of young people not in employment, education or training (NEET), and we have committed to offering work experience placements at B&Q and Screwfix to help tackle this,” he said. “While we want to keep doing this, whether we can depends on what the Chancellor decides in this Budget.”
Garnier’s intervention comes as retail bosses ramp up pressure on Healey to cut taxes on the industry and help them support the government’s pledge to deliver “growth in every postcode”.
The British Retail Consortium, which represents the industry’s top businesses including B&Q, has urged the Chancellor to unwind some of the hikes to employer national insurance contributions (NICs) implemented by his predecessor, Rachel Reeves.
Garnier said tackling business rates is the “single biggest opportunity for the Chancellor to help retailers keep investing” in the UK.
Retailers have long said business rates are an outdated tax which disadvantage high street firms in comparison to online sellers. They have urged the Labour government to stick to its election manifesto pledge to “replace” the tax system.
Healey must ‘level playing field’
The Kingfisher boss said: “If the government is committed to its growth strategy, it must reform this long-outdated business rates system and level the playing field between bricks and mortar shops and online-only operators.
“We understand the Chancellor faces difficult choices, but with a new administration comes new opportunities for change. Our message to deliver growth is therefore simple: take shops out of paying the higher rate.”
On Tuesday, the BRC and top retailers including Sainsbury’s and Tesco met with the Chancellor to set out their demands ahead of the Budget, which included business rates reform and action on Neets.
Kingfisher, which also owns Screwfix, lifted its profit forecast last month after its pivot toward trade customers delivered growing sales.
In May, Garnier announced his intention to depart Kingfisher after being poached by Dutch-Belgian retail giant Ahold Delhaize. On Tuesday, it was announced that he will be succeeded by Sebastian Gundel in February.
The Treasury was contacted for comment.