Mike Ashley attacks Burnham plans as 'populist'

Billionaire founder of Sports Direct, Mike Ashley, has labeled Prime Minister Andy Burnham's recent cost of living and retail policies as "populist reactions."

In a letter addressed to the prime minister, Ashley, a prominent entrepreneur, accused Burnham of "jumping on 'everyday fixes' or bandwagons." He argued that "disastrous" business rates policies and rising employment costs were severely hindering businesses. Ashley also dismissed a prior suggestion to increase business rates on large warehouses to offset reductions for pubs and clubs as "delusional."

A spokesperson for Downing Street stated that Burnham aims to "build a new economy that backs British business, delivers growth in every postcode and ensures the essentials in life - like energy, water and housing - are affordable again." They added that promises such as cutting VAT on household electricity bills and reducing business rates for certain companies are "just the start."

Earlier this month, Burnham pledged to revitalize Britain's "hollowed out" high streets by empowering councils to block new vaping and betting shops. He also introduced a plan to eliminate subscription traps and prohibit shops from using misleading recommended retail prices, which can exaggerate discount perceptions.

Ashley's letter, which the BBC has seen and the Financial Times first reported, criticized announcements made since Burnham succeeded Sir Keir Starmer as prime minister. The businessman urged Burnham to utilize his first Budget, scheduled for October 27, to reduce employer costs and revise the government's stance on business rates.

From April, pubs, social clubs, and live music venues are set to receive a 20% reduction in business rates. Additionally, a review has been initiated into the calculation of this tax, which high street businesses have long sought to reform.

"Shortsighted or populist reactions to underlying business challenges are not the answer," Ashley asserted in his letter. He has consistently advocated for a fundamental overhaul of the tax, including creating a level playing field between High Street retailers and their online competitors.

"If your answer is to tax larger retailers even more, through hiking business rates on retailer owned or third-party warehouses whilst reducing rates for pubs and clubs, then that is simply delusional," he wrote. Before becoming prime minister, Burnham had suggested that cuts for pubs, clubs, and music venues could be funded by higher levies on warehouses operated by online companies like Amazon, and by targeting owners of vacant high street properties.

Ashley built Frasers Group from a single Sports Direct store in Maidenhead in 1982 into a vast empire encompassing dozens of brands and employing 30,000 people. The billionaire has frequently faced controversy from investors and the media, with past accusations of achieving success through worker exploitation. In 2016, Ashley admitted to MPs that workers at his Derbyshire warehouse had been paid below the minimum wage and that a policy of fining staff for lateness was unacceptable.

The business, still owned by Ashley but managed by his son-in-law Michael Murray, recently acquired luxury department store Harvey Nichols this month, promising a "significant restructuring." Ashley also used his letter to inquire about the prime minister's plans to revive Harvey Nichols, which has encountered financial difficulties in recent years.

Referencing comments by Tory peer and former Marks & Spencer boss Lord Rose, who dismissed the announcements as "hot air," Ashley stated, "I agree with him." He continued, "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." Ashley concluded, "You have the chance to make a difference or get it horribly wrong."

Ashley warned that the High Street would be "further devastated" without significant reforms, and he cautioned that Burnham's suggestion of considering further business rates changes in the upcoming Budget was "too little, too late." He also used the letter to criticize Burnham's plans to curb the use of recommended retail prices, arguing that the true issue lies in "price fixing in sporting goods and other markets," citing the rising cost of official football merchandise.