Mike Ashley has written to the Prime Minister to call his plan for the British high street delusional, which is not a word the government expected to read in a business letter this week. The Frasers Group founder set out his objections in correspondence seen by the BBC and first reported by the Financial Times, and he did not dress them up.
Andy Burnham’s flagship retail policy is a shift in business rates: cutting bills for pubs, clubs and live music venues by around a fifth, paid for by higher taxes on the giant warehouses that serve online retail. The Prime Minister has said he will look at further rates changes at the next Budget. Ashley’s answer to that, in his phrase, is too little, too late.
It is the underlying costs he wants addressed, not the shopfront optics. “It is the disastrous business rates position (which I have raised many times over the years) and the dramatically increasing cost of employing people that are really causing business to struggle,” he wrote. Without major reform, he warned, the High Street would be further devastated, and the government’s approach would only rearrange the deckchairs.
The letter lands in a strange moment for British retail. Sports Direct’s parent company owns House of Fraser, Jack Wills, Gieves & Hawkes, Slazenger and a long list of other labels, so Ashley is not exactly an outsider complaining. But his complaint is one the wider industry shares in different words. Retailers have spent two years absorbing higher wage floors, higher energy contracts and rates valuations that reflect property values from a different economy. A tax swap that moves money between property classes does not touch any of that, and his argument is that it lets ministers photograph a policy while nothing changes on the shop floor.
The government’s reply, in effect, is that the warehouse tax exists precisely because out-of-town distribution sheds have expanded while town centre shops closed. Burnham’s team also points to powers for councils to block new vape and betting shop openings, meant to stop the high street turning into a corridor of the same three units in every town. Critics inside retail note those units pay rent where a warehouse pays a fraction per square foot, so the revenue substitution is real.
Ashley welcomes the Budget review signal in the letter, which reads like a man leaving the door open. He also defended recommended retail prices against what he called short-sighted or populist reactions, a jab at Labour figures who have attacked pricing practices at large chains. You do not have to like the messenger to recognise the message. The rates system, employer costs and planning delays are the arguments most retail executives make privately, and Ashley just said them in writing to Number Ten.
What happens next depends on the autumn. If the Budget trims high street rates further, expect the Frasers letter to be quoted back as evidence that the government is finally listening. If it does not, the letter joins a long shelf of warnings from retailers that aged like the stores they described.