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Dave Lewis criticises government over “sidelining” of retail

Published on: March 29th, 2019

The boss of Tesco has criticised those who look down on shop jobs, accusing ministers of prioritising car and steel manufacturers.

Dave Lewis, who has led Britain’s largest supermarket chain since 2014, said the way people talked about his sector and the roles it created was “a source of anger”.

The government was failing to “shepherd and help” retailers in the face of seismic challenges, he said, while providing support for “so-called traditional industries” such as automotive. Dave also called for urgent reform of the apprenticeship levy, claiming it effectively prevents Tesco from taking on more apprentices cost-effectively and warned that business rates were “killing” companies and “threatening thousands of jobs”.

His criticism came as English apprenticeship numbers rose for the first time since the introduction of the levy in April 2017. The levy requires employers with an annual wage bill of more than £3m to pay 0.5% of payroll costs into a fund for training.

The Department for Education revealed yesterday that 225,800 apprenticeships were started between last August and January — a rise of 10% on the same period a year ago.

Dave, addressing the annual British Chambers of Commerce conference in London, said the government’s apprenticeship strategy was broken. “There’s simply not enough flexibility and [the levy is] too open to abuse,” he told delegates. As Tesco can only use a fifth of the money it pays in, he branded the levy “an 80% tax on training”.

With 3m workers, Mr Lewis argued that the retail sector was “without doubt, strategically important to the UK economy” and questioned why it had no place in the government’s industrial strategy. “It’s treated differently from other, so-called traditional industries and I struggle with the logic of that,” he said. “When it comes to helping valuable industries make structural transitions, why wouldn’t we shepherd and help retail’s economic value in the same way that we do steel and cars? We don’t. And frankly, sometimes the way we talk about retail jobs in the UK economy can be a source of anger for me.”

With 300,000 employees and 3,400 UK stores, Tesco is one of the country’s largest private sector employers. It has a market value of £22b. Dave described a “brutal” year for retailers in 2018, with 61,000 jobs lost between March and September.

The retail sector pays a quarter of business rates, he also noted, with Tesco contributing £700m. A 2% levy on digital sales would raise £1.5b, he said — enough to fund a cut to business rates of 20%. “I would argue business rates are killing the present, damaging our economy,” he said.

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