// Tesco boss Ken Murphy urged the government to freeze the business tax rate now
// He said wider reform was needed of both business rates and the apprenticeship level
Tesco boss Ken Murphy has urged the government to freeze the business rates multiplier now ahead of making full-scale reform to the system.
He told Retail Week Live: “The government needs to make sure retail bills are sustainable and incentivise investment in jobs and places across the country. To do this, the multiplier must remain frozen – at least until any decisions or long term reforms are made.”
Murphy also urged the government to speed up the business rates appeal process, which he said was impeding cash flow that could be invested into stores, jobs, and lowering prices for consumers.
He said: “Three years for an appeals outcome is crazy. The appeal system is holding up hundreds of millions in cash flow amongst the retailers who needed most and could invest that money in local community investments.”
Murphy pointed out that retailers like Tesco provide key services such as ATM, post offices, and pharmacies, and government should be supporting such initiatives, “not taxing the retailer that provides them more onerously than everyone else”.
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Apprenticeship levy is not working
The Tesco boss also slammed the government’s apprenticeships levy, which he said was stymying the grocer’s ability to create jobs.
Tesco said the number of apprenticeships it offers has plummeted 70% since the levy was introduced.
“We’re not able to offer as many opportunities that we’d like – opportunities that are desperately needed – because of the outdated rules of the apprenticeship levy,” he says.
“Intended to fund more apprenticeships, lhe levy has actually had the opposite effect.”
“Since it was in its inception, Tesco has contributed £100m to the apprenticeship levy and to date, we’ve been able to access £14m of that money.
“And its not just Tesco. This year alone, more than £600m of unused levy funds were returned to the treasurer. Over 60,000 apprenticeship opportunities lost as a consequence of this legislation.”
Murphy said that with the right government support, “Tesco and other retailers could increase the number of apprenticeships by over 50% resulting in an additional 8,000 opportunities across the retail sector”.
Businesses should be allowed to use levy funding to create “high-quality pre-employment programmes” and Murphy called for flexibility to allow employers to offer more tailored, sector-specific training.
Funding should also go into support additional store working hours whilst apprenticeships are at college, which the Tesco boss said would enable smaller businesses to expand the number of positions they could create.
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