CEO has urged Chancellor John Healey to cut spending at next month’s Budget and says government must focus on economic growth
Lord Wolfson is chief executive of Next(Image: Next/PA Wire )
Next boss Lord Wolfson, has called on Chancellor John Healey to rein in public expenditure ahead of next month’s Budget, warning “you can’t spend your way out of a funding crisis”.
Next’s chief executive has pressed the government to curb spending, steer clear of further tax rises and cut through planning bureaucracy in order to stimulate economic growth.
Speaking to the media on Thursday, he said: “The only things that will really change the long-term trajectory [of the economy] are [the] government getting its spending under control and boosting supply-side measures.”
Wolfson, who has led Next for 25 years, added: “You can’t spend your way out of a funding crisis.”
With the October Budget drawing closer, retail chiefs have intensified pressure on the government to overhaul business rates and reduce employment costs, as reported by City AM.
However, Wolfson argued that Labour cannot afford any further tax cuts and should instead prioritise reducing expenditure while committing solely to supply-side measures that require no additional funding. “The UK government is forecast to spend over £100bn more than its income this year, and has little room to increase its borrowing,” Wolfson wrote in Next’s half-year results on Thursday.
“So there is little or no room for the Government to stimulate growth through spending or alleviate inflationary costs in fuel and energy. […] There are only two effective ways out of this predicament: control spending or boost growth, preferably both.”
Wolfson told reporters that asking Labour for tax cuts would be too “strong,” adding that business should instead hope for the tax burden “not to go up more”.
“Any organisation cannot carry on spending significantly more than its income and, in one way or another, that problem has to be addressed,” he said.
Earlier this week, former Bank of England chief economist Andy Haldane accused Andy Burnham of presiding over a “traditional tax and spend socialist government with better TikTok videos”.
The Prime Minister hit back at Haldane, his former unofficial adviser, claiming that he is prepared to take difficult decisions at what will be a “challenging” Budget for British households.
Wolfson said the Government could stimulate economic growth by cutting the red tape surrounding building regulations, biodiversity rules and archaeological restrictions, which is “holding us back”. “I think releasing that pent-up demand would do a lot to boost growth,” he said.
Lord Wolfson also defended the natural “evolution” of the high street, amid criticism of Andy Burnham’s plans to revitalise UK high streets by clamping down on gambling and vape shops and reducing business rate bills for pubs.
Frasers Group founder Mike Ashley has dismissed Burnham’s high street policies as “populist,” while JD Wetherspoon founder Tim Martin said it is “not up to” the Prime Minister to choose what is on the high street.
Asked about Burnham’s high street plans, Wolfson said: “The most important thing that the government could do for British high streets is to let them develop. Don’t try to decide ‘this should be a shop and that should be a restaurant and this should be a pub’. Just let the market do its work and transform British high streets into what people most want.”
In the UK, Next’s in-store sales fell by 0.4 per cent in the six months to July, while online sales rose by eight per cent. Wolfson said he anticipates high street sales across the group will continue to decline gradually in the coming years.
He said: “What I’m saying is: don’t try and turn back the clock. If your aim is to get the high street back to where it was, you’re barking up the wrong tree.”
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