The recent government budget has drawn sharp criticism from John Lewis Partnership CEO Nish Kankiwala.
- Kankiwala labelled the budget a ‘two-handed grab’ from UK businesses.
- Increased national insurance contributions and delayed business rates reform are key concerns.
- John Lewis and Waitrose face significant financial impacts due to these measures.
- The CEO calls for radical changes to business rates to alleviate these pressures.
John Lewis Partnership’s CEO, Nish Kankiwala, has openly criticised the government’s budget proposals, describing them as a ‘two-handed grab’ from businesses. He emphasised the significant financial strain these measures would impose on companies, particularly pointing to the increase in employers’ national insurance contributions and the delay in reforming business rates.
Kankiwala highlighted the unexpected nature of these budget decisions, which also involved lowering the earnings threshold for national insurance contributions. This, he argues, exacerbates cost pressures on businesses that are already facing financial challenges.
The John Lewis Partnership, encompassing both John Lewis and Waitrose, is confronted with ‘tens of millions’ in additional expenses starting next year. Despite acknowledging the government’s challenging position, Kankiwala advocates for a fundamental overhaul of business rates, suggesting that such a move could significantly alleviate financial burdens on companies.
In light of record inflation levels, Kankiwala expressed concerns about potential price increases affecting consumers. He stated, ‘The last thing we need is a resurgence of inflation, because we just got that under control, and inflation is not good for anybody…We will try and control [pricing] as much as possible.’ This demonstrates his commitment to minimising consumer impact amidst rising operational costs.
Despite these financial challenges, the business remains on track for substantial profit improvements. John Lewis reported a significant reduction in pre-tax losses from £59 million to £30 million over a 26-week period ending in July. Moreover, the company is set to invest £542 million into its operations this year, underscoring its strategy and commitment to growth even in the face of adversity.
Nish Kankiwala’s critique highlights the pressing need for government consideration of business rate reforms to support UK businesses.
