Asda boss explodes at Rachel Reeves and orders her to 'stop taxing everything!'

The boss of one of Britain's biggest supermarkets has delivered a blistering attack on Rachel Reeves, urging the Chancellor to stop "taxing everything" as businesses and middle-class families buckle under mounting financial pressure.

Allan Leighton, chairman of Asda, launched the stinging rebuke as speculation mounts that Ms Reeves is plotting another devastating round of tax hikes to plug a gaping £50billion hole in her Budget plans this autumn, reports the Daily Mail.

The retail veteran accused the Chancellor of "taxing everything in some way, shape or form" - warning that surging costs are being passed straight onto struggling consumers. The intervention comes as Asda makes new stores announcement as it publishes list of 22 locations.

"There's no doubt all of this is hitting the pocket of the consumer. And when that happens, that's not particularly good for anybody," he said.

"I think there's more gloom than we've seen for a long time."

The explosive criticism will sting particularly hard in Downing Street, given that Mr Leighton was recently chairman of The Co-operative Group which sponsors 41 Labour MPs.

Labour flagging

With Labour already backing down on planned welfare cuts, fears are growing that the Chancellor will unleash a fresh tax assault targeting pensions, savings and property to balance the books.

Ms Reeves faced fierce backlash yesterday over plans to hammer landlords with new taxes, while a Labour-leaning think tank piled pressure on her to slap an £8billion-a-year windfall tax on High Street banks.

But as the Chancellor plots her next tax raid, economists have issued a chilling warning that she must slash public spending dramatically or risk a humiliating 1976-style bailout by the International Monetary Fund.

With the UK government now paying more to borrow on bond markets than any other G7 nation, experts warn Britain is "drifting without an anchor" under Labour rule and facing a punishing "moron premium".

The country is still reeling from the Chancellor's last £40billion tax bombshell - widely blamed for crushing growth and destroying jobs across the economy.

'Hitting the pocket of the consumer'

The retail sector alone has been clobbered with an eye-watering £7billion annual cost increase, driven by Ms Reeves' national insurance raid on employers and minimum wage hikes.

Asda joined a chorus of major retailers - including Tesco, Sainsbury's and John Lewis - in writing to the Chancellor last week, desperately pleading against further tax rises.

Speaking yesterday, Mr Leighton, who has held senior roles at The Co-op and Royal Mail, warned the Government's policies are "contributing to inflation" which is "hitting the pocket of the consumer".

He delivered a stark message to ministers: stop attacking business.

"Growth isn't driven by government," he declared, adding that if companies cannot invest "then we will not grow no matter what the government says or does".

Tory business spokesman Andrew Griffith launched his own broadside at the Chancellor, saying: "Top retailers know they'd be out of business if they don't deliver value for customers. It's a shame the Chancellor doesn't share that mindset.

"The only way to get the cost of the weekly shop down is for Labour to stop piling on taxes."

The Confederation of British Industry yesterday revealed the dire situation has forced companies into "increasingly shifting focus to short-term fire-fighting" rather than hiring new staff and investing in future growth.

"The government's fiscal decisions are continuing to bite," warned Martin Sartorius, principal economist at the CBI. "Business cannot be asked to balance the books again at the Autumn Budget."

Poorest hit the hardest

In a devastating blow to Labour's claims of protecting the worst-off, official figures yesterday exposed how poorer households are suffering a bigger cost of living squeeze than wealthy families.

Shocking analysis by the Office for National Statistics shows inflation battering poorer families has rocketed to 4.1 per cent - compared with just 3.8 per cent for high-earning households.

It marks the first time lower income families have endured higher inflation than the wealthy since 2023.

Shadow chancellor Mel Stride seized on the damning figures, declaring: "Inflation has nearly doubled since Labour came to power - and it's ordinary working families, already feeling the pinch, who are being hit the hardest."

The statistics demolish Labour's claims that its economic policies shield working people while asking "those with the broadest shoulders" to contribute more.

Headline inflation has soared to 3.8 per cent in July - an 18-month high and a dramatic surge from the 2.2 per cent rate when Labour seized power a year ago.

The UK economy is now plagued by rising unemployment and slowing growth, with many experts blaming Ms Reeves' crushing £25billion national insurance raid on employers for the economic gloom.

Banks next in firing line

But with Left-wing Labour MPs fiercely resisting spending cuts, the Chancellor faces mounting pressure to plug her Budget black hole with yet another tax assault.

The Institute for Public Policy Research has proposed a new bank levy that could rake in £8billion annually - a move certain to trigger fury from lenders.

Banking bosses at Natwest and Lloyds already warned Ms Reeves last month that a tax raid on their sector would sabotage efforts to boost the economy through growth financing.

Trade body UK Finance slammed the proposals, arguing that fresh bank taxes would hammer Britain's international competitiveness.

"Banks based here already pay both a corporation tax surcharge and a bank levy," it said.

The National Institute of Economic and Social Research has warned Ms Reeves must find a staggering £50billion through tax rises or spending cuts.

Reeves doubles down on tax

Despite the mounting pressure, the Chancellor has vowed to stick to her pledge not to raise income tax, national insurance or VAT - while maintaining fiscal rules preventing additional borrowing.

Reports suggest she is considering extending the income tax threshold freeze, introducing a "mansion tax" on expensive home sales, and launching a raid on the gambling industry.

She is also reportedly eyeing higher business rates for larger units, which could hammer supermarkets with bigger bills.

Asda's Mr Leighton branded such changes "very unhelpful".

He added: "All these things don't make life easier. They are contributing to inflation, and inflation is hitting the pocket of the consumer."

Frustrated retail bosses warned last week they would be unable to "absorb" further cost increases, potentially forcing price rises that would deliver another devastating blow to British living standards.

Big business can fall hard

A coalition including Tesco, Sainsbury's, John Lewis, Morrisons, Aldi, Lidl, Ikea, Boots, JD Sports, Currys and Kingfisher signed a desperate letter to the Chancellor.

They highlighted how Government policies had already "added £7billion in new costs to retail businesses" through Ms Reeves' employer national insurance hike, minimum wage increases, and a new packaging tax.

The British Retail Consortium members warned that further business tax rises would put Labour at risk of breaching its own manifesto pledges.

Asda was this week named the worst performing major supermarket over the three months to August 10, with sales plunging 2.6 per cent to £4.22billion - making it the only major grocer to see sales collapse apart from the Co-op, which suffered a 3.2 per cent drop.

The supermarket's market share has tumbled from 12.7 per cent to 11.8 per cent over the past year, according to market researcher Worldpanel.

Internal figures also revealed that middle-class families' disposable income had fallen for the first time in two years.

Asda has pressured suppliers to slash their prices in recent months as it desperately tries to win back customers.

Mr Leighton said: "We try to do the right thing for the customer and if the suppliers want to come with us, and a lot of them do, then we take that support.

"But if we think it's the right thing to do for the customer, we're going to do it anyway."

Before last year's general election, Sir Keir Starmer's party promised to turbocharge economic growth and boost family living standards.

But official figures published yesterday showed headline inflation surged beyond expectations to 3.8 per cent last month - the highest level since January 2024 - while food and drink inflation climbed to 4.9 per cent in July from 4.5 per cent in June.