The boss of Next has issued a stark warning to Rachel Reeves about “anaemic” economic growth and a slump in employment.
Lord Wolfson the long serving and respected chief executive of the high street fashion retailer, said he remained cautious about prospects because: “The medium to long-term outlook for the UK economy does not look favourable.”
He said while Britain was not approaching a recessionary cliff edge, economic progress was being held back by four factors: “declining job opportunities, new regulation that erodes competitiveness, government spending commitments that are beyond its means, and a rising tax burden that undermines national productivity.”
The life peer, who sits on the Conservative benches in the Lords, said that employment, “particularly at the entry level, faces the triple pressure of rising costs, increasing regulation, and displacement through mechanisation and AI.”
It is the latest attack on Government economic policy by a senior business leader in the run up to the November Budget.
Lord Wolfson made the comments as he presented first half results for the six months to July. Group sales were up 10.3% to £3.25 billion - although boosted by warm weather and the cyber attack that crippled rival Marks & Spencer while pre-tax profits rose 13.8% to £515 million.
Despite the strong interim figures Next shares fell 6% on the gloomy prospects on the British economy.
Lord Wolfson added: “Our enthusiasm is tempered by the knowledge that the first half was boosted by factors that are unlikely to continue, and the belief that the UK economy is likely to weaken going forward. “
Lord Wolfson also pointed out that vacancies at Next have fallen by 35% over the past two years while applications are up 76% The number of applicants per vacancy is 2.7 times higher than two years ago.
He warned that Labour’s “well intentioned” Employment Rights Bill -championed by former Deputy Prime Minister Angela Rayner - will results in the “unintended consequence of reducing jobs and eliminating earnings potential. “
Although this is unlikely to result in wholesale redundancies the impact “is likely to be felt by those looking to enter the workforce or move jobs – the challenge will be finding suitable vacancies. That certainly resonates with the stories we hear about the difficulties young people are experiencing when trying to find work. “
Aarin Chiekrie, equity analyst, at investment platform Hargreaves Lansdown said Next is “clearly unimpressed by the current government’s performance, which has brought about declining job opportunities, unfavourable regulation, unsustainable government spending, and rising taxes that make it harder for the economy to grow.”
