In a recent address at the Retail Week x The Grocer conference, Allan Leighton, chairman of Asda and former CEO during the late 1990s, voiced strong concerns regarding the Labour Party’s diminishing support for British businesses. He pointed out that the current government has become increasingly challenging for firms to engage with, contrasting sharply with the more business-friendly attitude he experienced two decades ago.
A Shift in Government Attitude
Leighton, who returned to Asda as chairman in 2024, expressed disappointment over how the Labour Party’s approach to business has evolved. He remarked that during his previous tenure, the government actively sought to collaborate with corporate leaders. “Back then, most of the government was pretty business-friendly, and over time that’s got, I think, more and more difficult,” he stated, highlighting a shift that he believes is detrimental to the business landscape.
His comments come amid growing unease within the retail sector, where executives are increasingly vocal about the challenges posed by government policies. Leighton’s perspective aligns with concerns voiced by other industry leaders, including Tesco’s Ashwin Prasad, who warned that Labour leader Sir Keir Starmer risks creating an environment ripe for unemployment.
Rising Costs and Regulatory Burdens
Leighton outlined several pressing challenges that businesses currently face, including escalating hiring expenses due to minimum wage increases and rising National Insurance contributions. The introduction of new workers’ rights legislation, coupled with additional pressures from packaging fees and soaring energy costs, has left many firms grappling with constraints beyond their control.
Despite these adversities, Leighton remains resolute. “Businesses have to deal with it, which is why I don’t complain about it,” he asserted, emphasising a pragmatic approach to navigating the complexities of the current economic climate.
Calls for Enhanced Government Support
In a connected response to Chancellor Rachel Reeves’ recent spring statement, Shevaun Haviland, director-general of the British Chambers of Commerce (BCC), echoed Leighton’s sentiments. She urged the government to take more decisive action to stimulate the economy and bolster support for businesses. Haviland noted that while the UK economy appears to be on a positive trajectory, the anticipated GDP growth of below two per cent annually until 2030 is insufficient for sustained economic health.
Moreover, Haviland cautioned that the ongoing conflict in the Middle East could have far-reaching implications for commodity prices, particularly oil and gas. The BCC has called for proactive measures to mitigate the impact of these external pressures, highlighting that recent research indicates a growing number of firms are eager to expand, with nearly half planning growth this year.
Asda’s Future and Leadership Direction
Asda, currently the fourth-largest supermarket chain in Britain, has faced declining sales year-on-year, a trend that Leighton acknowledges as concerning. He anticipates that a turnaround will take time, affirming that he views his role as one that requires a commitment of three to five years to effect meaningful change.
In a nod to continuity, Leighton hinted at the possibility of promoting a new chief executive from within Asda’s existing team. “I’m looking for signs of progress, and there are signs of progress,” he remarked, indicating a cautious optimism about the path ahead.
Why it Matters
Leighton’s remarks underscore a broader concern within the business community regarding the evolving relationship between government and industry. As economic pressures mount and businesses strive to adapt to new realities, the call for supportive policies becomes increasingly urgent. The dialogue initiated by leaders like Leighton could be pivotal in shaping a more conducive environment for growth, innovation, and job creation in the UK. As the government navigates these complex challenges, the actions it takes now will undoubtedly influence the future viability of British businesses for years to come.
