The head of Marks & Spencer, Stuart Machin, has launched a scathing attack on Chancellor Rachel Reeves over reported plans for supermarket price controls, branding the proposals “completely preposterous” and warning they risk dragging Britain back to “1970s-style” economic intervention.
Machin said ministers should stop attempting to manage prices from Whitehall and instead focus on easing the growing burden of taxes and regulation facing retailers.
The M&S chief executive revealed supermarkets were already absorbing high costs on staple goods, saying the retailer loses money on products including bread and bananas, while milk prices have remained largely unchanged despite rising expenses across the supply chain.
“Food retailers are taking a big responsibility to try and minimise passing through prices,” Mr Machin said.
“So, my advice to the Government is to reduce some of the tax and regulatory burdens and free us up in a very competitive market.”
His intervention came amid mounting alarm across the retail sector over proposals reportedly being explored by the Treasury that would see supermarkets freeze prices on around 20 essential items in exchange for regulatory concessions.
Senior industry figures warned the measures could distort competition, undermine investment and ultimately lead to shortages or higher prices elsewhere.
Stuart Rose delivered an equally devastating assessment, dismissing the idea as “stuff and nonsense” and warning it would inevitably fail.
“This smacks of state control,” Lord Rose told BBC Radio 4’s Today programme. “It’s idiotic, it’s dangerous, and it will never work.”
He compared the proposals to the failed interventionist economic policies of the 1970s under former prime ministers Edward Heath and Harold Wilson.
“Fundamentally these things don’t work,” he said. “We have no better system than a free market economy.”
The backlash intensified after Helen Dickinson accused ministers of fundamentally misunderstanding the economics of the grocery sector.
Ms Dickinson argued Britain already benefits from some of the lowest grocery prices in Western Europe because of intense competition between supermarkets, warning that forcing retailers to sell products at a loss would backfire.
She described the plans as “1970s-style price controls” and said ministers should instead tackle the underlying causes of food inflation, including soaring energy costs and supply disruption linked to instability in the Middle East.
Under the reported Treasury proposals, supermarkets could receive exemptions from certain environmental and regulatory measures in exchange for freezing prices on staple goods such as bread, milk and eggs.
Potential incentives under discussion reportedly include relief from net-zero packaging levies and delays to anti-obesity regulations.
The Government is under growing pressure to contain inflation as rising energy costs and disruption through the Strait of Hormuz push up food and commodity prices globally.
The Bank of England has warned food inflation could accelerate sharply later this year if geopolitical instability continues.
Dan Tomlinson insisted Labour was not planning mandatory price caps, though he declined to rule out future intervention if inflationary pressures worsen.
Leave a Comment