Next chief executive Lord Wolfson has issued a Lord Wolfson Budget warning directly to Chancellor John Healey, calling on the government to rein in public spending ahead of next month’s Budget rather than look to further tax rises or stimulus programmes. The appeal came alongside Next’s half-year results, in which Wolfson also disclosed that the retailer has taken a £15 million cost hit from the Iran conflict and may need to raise prices if the war continues.
Speaking to reporters on Thursday, Wolfson said: ‘The only things that will really change the long-term trajectory [of the economy] are [the] government getting its spending under control and boosting supply-side measures.’ He added: ‘You can’t spend your way out of a funding crisis.’
Lord Wolfson Budget warning: spending, not stimulus
In the written half-year results published alongside the briefing, Wolfson set out the arithmetic plainly. ‘The UK government is forecast to spend over £100bn more than its income this year, and has little room to increase its borrowing,’ he wrote. ‘So there is little or no room for the Government to stimulate growth through spending or alleviate inflationary costs in fuel and energy. There are only two effective ways out of this predicament: control spending or boost growth, preferably both.’
Wolfson, who has run Next for 25 years, was careful not to call explicitly for tax cuts, saying that would be too ‘strong’ a request. Business, he argued, should instead hope for the tax burden ‘not to go up more’. ‘Any organisation cannot carry on spending significantly more than its income and, in one way or another, that problem has to be addressed,’ he said.
The remarks land at a politically charged moment. Earlier this week, former Bank of England chief economist Andy Haldane accused Prime Minister Andy Burnham of presiding over a ‘traditional tax and spend socialist government with better TikTok videos’. Burnham hit back, saying he is prepared to take difficult decisions at what will be a ‘challenging’ Budget for British households. Wolfson’s Lord Wolfson Budget warning is a cooler, more commercial version of the same concern: that the government’s fiscal position leaves little room to manoeuvre.
Planning red tape and the high street debate
Beyond the public finances, Wolfson identified planning rules as an area where the government could act without spending money. Building regulations, biodiversity rules and archaeological restrictions are ‘holding us back’, he said, and cutting through that red tape would release pent-up demand. ‘I think releasing that pent-up demand would do a lot to boost growth,’ he said.
On the high street, Wolfson positioned himself alongside other retail figures who have pushed back against Greater Manchester Combined Authority Mayor Burnham’s proposals to revive town centres by restricting gambling and vape shops and cutting business rates for pubs. Frasers Group founder Mike Ashley dismissed those policies as ‘populist’, and JD Wetherspoon founder Tim Martin said it is ‘not up to’ the Prime Minister to decide what occupies the high street.
Wolfson said the government’s best contribution would be to step back entirely. ‘The most important thing that the government could do for British high streets is to let them develop. Don’t try to decide “this should be a shop and that should be a restaurant and this should be a pub”. Just let the market do its work and transform British high streets into what people most want,’ he said.
Next’s own half-year numbers illustrate the trend Wolfson is describing. In-store sales in the UK dipped by 0.4 per cent in the six months to July, while online sales rose by eight per cent. He expects store sales to continue falling gradually in the years ahead. ‘What I’m saying is: don’t try and turn back the clock. If your aim is to get the high street back to where it was, you’re barking up the wrong tree,’ he said.
The wider financial picture for Next carries its own risks. According to Business Live, the retailer has flagged a £15 million cost impact from the Iran conflict and warned that a prolonged war could force it to pass higher prices on to customers. That context sharpens Wolfson’s argument: a retailer already absorbing external cost shocks is hardly well placed to absorb fresh tax increases on top. His message to the Chancellor, in plain terms, is that the Budget must address the structural problem rather than paper over it.
