Tesco boss warns Reeves against further tax rises as retailers fear impact of late budget

Ken Murphy, chief executive of Tesco, has delivered a direct appeal to Chancellor Rachel Reeves, urging her to refrain from further tax increases as concerns mount over the impact of the delayed autumn budget on the UK’s already beleaguered retail sector. Murphy stressed that retailers are still adjusting to significant additional operating costs from the last budget and insisted, “enough is enough.”

The sector has faced a £7 billion surge in costs following rises in employers’ national insurance contributions and increases to the minimum wage. For Tesco alone, this translates to an expected £1 billion increase in its employment bill over the next four years. Murphy called on the chancellor to introduce pro-growth and pro-jobs policies that will aid consumers grappling with cost of living pressures. He repeated Tesco’s request for large retailers to be exempted from higher business rates currently under government review.

This year’s autumn budget, traditionally held in late October or early November, has been shifted to 26 November, just two days before Black Friday. Retailers are anxious that the timing will place a damper on consumer spending during the crucial pre-Christmas trading period. Industry leaders warn that the delay is casting a shadow over consumer confidence, which has already waned amid expectations of higher taxes.

Recent data from GfK’s closely followed consumer confidence survey reported a marked decline last month, largely attributed to anticipated tax hikes. The chief executive of a major UK clothing retailer, overseeing over 100 outlets, remarked that ongoing uncertainty is “further negatively affecting consumer confidence in general, as we head into a critical time in the trading calendar.”

The chief executive of another prominent retailer expressed anxiety over the strategic misstep of announcing the budget so close to Black Friday. They cautioned that consumers might hold off on purchases as they absorb the budget’s implications, despite attractive discounts on offer.

Clive Black of Shore Capital sharply criticised government policy, arguing that businesses have been unfairly targeted for revenue generation while the public sector endures “waste, poor culture, and productivity collapse.” The British Retail Consortium echoed industry calls for clear guidance on policy and tax to support investment and safeguard jobs across the retail landscape. Meanwhile, a Treasury spokesperson defended the timing as consistent with required Office for Budget Responsibility procedures and pointed to progress on trade deals and reforms in business and corporation tax.