Britain’s economy is buckling under the weight of Labour’s tax-and-spend approach, according to Asda boss Allan Leighton, who has warned the country is nearing a “tipping point” ahead of the Chancellor’s next Budget.
Speaking candidly about the state of the nation’s finances, Mr Leighton said the Government’s strategy of piling taxes onto businesses and households had choked off growth, dented consumer confidence, and left companies unwilling to invest.
In a blunt assessment of Labour’s approach, he noted that the basic economics were obvious, quipping that you don’t need a Harvard degree to work out that higher taxes lead to lower spending, weaker confidence, and reduced business investment.
While the retail veteran stopped short of demanding Labour reverse its tax increases outright, he was clear that every additional cost imposed on business ultimately gets passed on, whether to shoppers, staff, or shareholders, and that this dynamic has become a serious drag on the economy under the current administration.
Mr Leighton’s remarks land at an awkward moment for Labour, with the party facing mounting pressure over the cost of living, a crisis largely of its own making, critics would argue, given the tax burden it has imposed since taking office. He offered a mildly more generous assessment of Chancellor John Healey, calling him sensible and objective, but pointedly withheld judgment on Andy Burnham, saying he would wait to see the Prime Minister’s economic agenda before forming a view.
Adding to the gloom, Mr Leighton warned that food price inflation is all but inevitable in the coming months, with fresh produce likely to bear the brunt as this summer’s punishing heatwaves and drought conditions damaged crops across the country. With swathes of England still gripped by drought, and growers reporting poor yields, shoppers already squeezed by Labour’s tax rises now face rising grocery bills as well.
The comments came despite a rare bright spot for Asda itself, which posted its first period of sales growth in more than two years, with like-for-like sales up 0.2 per cent over seven weeks and food sales rising 0.7 per cent in the second quarter. Mr Leighton, who returned to the supermarket in 2024 to lead a turnaround, cautioned that the business remains in the early stages of recovery, having endured a costly, near £1 billion split from former owner Walmart’s technology systems, alongside a pre-tax loss of £989 million last year.
As part of that recovery drive, Asda has pressed ahead with controversial cost-cutting measures, including outsourcing roughly 3,500 cleaning jobs and putting around 1,200 jobs at risk through the outsourcing of its George clothing distribution, moves that have put it on a collision course with unions even as Mr Leighton insists such practices are already standard across the industry.
Taken together, Mr Leighton’s comments amount to a stark warning from one of Britain’s leading business figures: under Labour, the economy is being weighed down by higher taxes, higher costs, and now, higher food prices too, with the coming Budget seen as a genuine crossroads for the country’s economic future.
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