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Tesco boss urges rethink on minimum wage and business rates

Published: 07:45 10 Nov 2015 EST

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Lewis is bidding to turn round the lumbering Tesco supertanker

The boss of Tesco (LON:TSCO) has demanded a shake-up of business rates and government plans to hike the national minimum wage.

Dave Lewis has called for cuts to business rates to help the supermarket chain to cope with growing online competition.

Lewis also urged ministers to change their plans to increase the minimum wage, dubbed the National Living Wage by Chancellor George Osborne in his summer budget.

The supermarket chief says the proposals to increase the £6.50 minimum wage to £7.20 and to further lift it to £9 an hour by 2020 was a substantial extra cost.

Lewis asked for a meeting with ministers to discuss his demands.

He reportedly told the annual conference of the Confederation of British Industry lobby group that the wage was boosting pressure on employers to increase base pay at the expense of more flexible benefits such as pensions and staff discounts.

"The unintended consequences [of the living wage] have not been fully thought through," the Daily Telegraph quoted Lewis as saying.

Lewis is bidding to turn round the Tesco supertanker after big losses caused by accounting issues and cut-price competition from the likes of Aldi and Lidl.

Tesco is closing unprofitable shops and its head office in Cheshunt, Hertfordshire, and has reduced loyalty discounts such as shopping vouchers.

But Lewis said those cuts and reductions in corporation tax could be eclipsed by a failure to reform the business rates regime.

"It is unsustainable and needs a review," he was quoted as saying.

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