Budget will be a test of the government’s growth credentials

When I was appointed chief executive, my chairman, Archie Norman, told me something I’ll always remember: “Make decisions for the lifetime of M&S.”
He asked me to look beyond a reporting cycle or the length of my tenure and think of the 140-year history of the British institution I have the privilege of running and the future generations of customers we will serve.
Years of drift had left the company in a precarious position. The easiest thing to do would have been to raise prices, delivering short-term profits to shareholders. But it would have been the wrong thing. Instead, we invested in value and quality to deliver for our customers, earning back their trust. We are still at the foothills of our transformation.
So I can only imagine the pressure the chancellor is under as she considers the challenge before her. Economic growth is too low, government debt too high and we’re less productive than our international peers.
But I keep hearing that the difficult decisions in the forthcoming budget are about raising taxes. They’re not. Raising taxes is a short-term, easy fix. The much harder decisions are around fundamentally re-engineering the British economy, tackling the issues that have held us back for decades.
M&S is one of the biggest taxpayers in the UK, contributing £480 million to the Treasury. We’re proud to contribute to the public services that the communities we serve rely on to succeed.
I support the new government’s focus on making work pay. M&S doesn’t have zero-hours contracts and we invest beyond the proposed new standards on things like maternity and paternity leave because we value our colleagues.
Yet when I hear about plans to increase national insurance, a tax with no link to profit which hits bigger employers like us and our smaller suppliers, I’m concerned. The chancellor was right in the past to call national insurance a tax on workers. It makes it more difficult to offer the life-changing opportunity of a job. Particularly if you raise other taxes that hit retailers, like business rates or fuel duty. Raising these taxes isn’t the hard decision, it’s the easy way out. It might improve the public finances in the short term, but it makes economic recovery harder and hits our customers and colleagues still struggling with the cost of living.
The beginning of any genuine turnaround is the ability to face the unvarnished truth. That means being honest with the public, but not “kitchen-sinking”: repeating and exaggerating grievances to support a political narrative. Consumer confidence has nosedived after all the doom and gloom. We need messages that are direct, not despondent. Leaders who look forward, not back.
After telling the truth comes setting out solutions. Labour’s manifesto contained lots of great pledges, but I worry the reality of government is watering them down. Bold ambitions to “overhaul” business rates and to give firms flexibility over half of their apprenticeship levy funds must not be missing from the chancellor’s statement.
The ultimate test is on delivery. The government is absolutely right that unlocking investment means stripping away red tape, which requires more than just unclogging the planning system. As each decision comes before them on a new piece of regulation or a proposed development, political and activist pressure will mount, but they must stick to their word. Businesses are littered with regulatory burdens that add cost and complexity for little public benefit.
I hope the rumours of the past few weeks are exaggerations. This government was elected to promote a growth agenda, but what I’ve seen and heard so far doesn’t add up to a coherent growth narrative. The budget is a moment to put this right.
Stuart Machin is the chief executive of Marks & Spencer