Sports Direct Founder Slams PM’s High Street Rescue Strategy as Short-Sighted Populism

Mike Ashley, the founder of Sports Direct, has strongly criticised Prime Minister Andy Burnham’s recent cost of living and retail policies, branding them as “populist reactions” that fail to address deeper economic issues.

In a letter addressed to the Prime Minister, Ashley accused him of “jumping on ‘everyday fixes’ or bandwagons” at a time when businesses are grappling with what he described as the government’s “disastrous” approach to business rates and increasing employment costs.

The retail magnate also dismissed a previously floated proposal to raise business rates on large warehouses in order to fund reductions for pubs and clubs, calling the idea “delusional.”

Responding to the criticism, a spokesperson for Downing Street stated that Burnham is committed to building “a new economy that backs British business, delivers growth in every postcode and ensures the essentials in life… are affordable again.”

The spokesperson added that recent pledges, such as removing VAT from household electricity bills and providing business rates relief for certain companies, are “just the start” of the government’s broader economic agenda.

Earlier this month, Burnham unveiled a series of measures aimed at revitalising Britain’s “hollowed out” high streets, including giving local councils new powers to block the opening of additional vape shops and betting premises.

He also fast-tracked legislation designed to eliminate subscription traps and prohibit retailers from using misleading recommended retail prices, a practice that can artificially inflate the appearance of discounts.

However, Ashley’s letter, which has been reviewed by the BBC and was first reported by the Financial Times, targets these and other announcements made since Burnham assumed office, succeeding Sir Keir Starmer as prime minister.

The businessman urged the Prime Minister to use his forthcoming Budget, scheduled for 28 October, to lower the cost burden on employers and to fundamentally reassess the government’s stance on business rates.

Under existing plans, pubs, social clubs and live music venues are set to receive a 20% reduction in business rates from April, while a comprehensive review into how the tax is calculated has been initiated, a long-standing demand from high street operators seeking reform.

“Shortsighted or populist reactions to underlying business challenges are not the answer,” Ashley stated firmly in his correspondence.

Ashley has consistently advocated for a major overhaul of the business rates system, arguing that it should create a more level playing field between traditional 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.

Prior to becoming Prime Minister, Burnham had suggested that financial relief for pubs, clubs and music venues could be offset by higher levies on warehouses operated by major online corporations, such as Amazon, as well as measures targeting the owners of derelict high street properties.

Ashley transformed Frasers Group from a single Sports Direct shop in Maidenhead in 1982 into a vast corporate empire encompassing dozens of brands and employing approximately 30,000 people.

The billionaire has often been a controversial figure among investors and the media, having faced longstanding accusations of building his business empire by exploiting its workforce.

In 2016, Ashley conceded before a parliamentary committee that workers at his Derbyshire distribution centre had been paid below the national minimum wage, and he acknowledged that a company policy of fining employees for lateness was unacceptable.

The group, which remains under Ashley’s ownership although now led by his son-in-law Michael Murray, recently completed the acquisition of the luxury department store Harvey Nichols and has signalled plans for a “significant restructuring” of the business.

Frasers Group has also been steadily expanding its shareholding in the German menswear label Hugo Boss, following the rejection of its initial takeover offer for the company.

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