The boss of Marks & Spencer has attacked government plans to introduce a supermarket price cap in response to rising food prices. 

Stuart Machin described the plans as 'completely preposterous' and said the retailer had not received any communication from the Government. 

'The first time I heard about the issue of price caps was when it was proposed by the SNP in Scotland. And then I read in the papers this morning. We have had no direct communication from the government', he said.

And a top City analyst accused the Treasury of ‘madness’ and added: ‘It appears to be losing its mind in an orgy of neo-Soviet policy ideas.’ 

Labour is reportedly pushing major supermarkets to limit the price of everyday essentials in return for easing regulations. 

The price of eggs, bread and milk would be voluntarily capped under the proposals in return for easing packaging policies and delaying rule changes around healthy food.

Machin said: 'It is completely preposterous - the government shouldn't be trying to run [a] business. It could bring down prices by reducing the tax and the regulatory burden and free us up.' 

He added: 'Food inflation is running at three per cent, but there are products on which we do not make money. 

'Milk is 85p a bottle. It is loss-making. Our 75p bread is also [at a] negative margin. Bananas are on a minus -6 per cent margin. A tin of baked beans is 45p. That's on a minus -20 per cent margin.'

Clive Black, head of consumer research at City broker Shore Capital, said: ‘Whilst the UK Government is on the ropes electorally, it appears to be losing its mind in an orgy of neo-Soviet policy ideas, seemingly popular with elements of the electorate in Camden, but also displaying extensive naivety, ideology, and, it must be said, stupidity, that will ultimately only further deflect capital from the UK.

‘Meanwhile, the hypocrisy of one of the biggest sources of UK food inflation, the Treasury, asking for voluntary price cuts is flabbergasting whilst anti-trust regulators and lawyers will be licking their lips; true madness.

‘It is time to actually adopt a proper UK food policy that increases security of supply and feeds economic growth.’

The row over price caps came as Marks & Spencer hailed progress on its transformation plan and expects profits to recover after taking a significant hit from last year's cyber-attack. 

The high street retailer reported adjusted pre-tax profits of £671.4million for the year ending 29 March, down 23.8 per cent from the previous year.

It came as revenues plunged 25 per cent to £13.8 billion, after M&S was forced to stop online sales following a hack last Easter. 

It said the attack had cost £131.3million in ‘material system recovery, risk management and specialist advisory costs’.

A strong showing in the retailer’s food business, where sales grew seven per cent to £9.7billion, helped to offset the 7.7 per cent drop across fashion, home and beauty.

It said the slump in fashion sales to £3.9billion had reflected the pause in online trading and access to its systems, which affected availability, with womenswear seeing the greatest impact.

Despite the setback, M&S maintains its ambition to double online sales across fashion, home and beauty.

The iconic British brand said it had been a ‘year of two halves’ as it returned to growth in the second half of the year, with adjusted profit up 4.1 per cent year-on-year.

It now expects profit growth to resume in the current financial year, but pointed to higher fuel, freight and input costs, as well as higher taxes and ‘regulatory headwinds’.

It added that it had made further progress on its transformation ‘enabled by a strong balance sheet’, with plans to further focus on technology and automation.

Last month, M&S announced an overhaul of its Sparks loyalty card, which it said was ‘laying the groundwork for greater personalisation and engagement.’

Chief executive Stuart Machin said: ‘That was an extraordinary year. We were laser focused on our customers, worked incredibly hard to recover our business, and we came out stronger.’

Marks & Spencer shares rose 1.41 per cent to 331.4p, but are down 10 per cent over the past year.

Mark Crouch, market analyst for eToro, says: ‘With the cyber-attack now in the rear-view mirror, investors will want reassurance that the recent operational setbacks were temporary and that investment spending can translate into more consistent earnings growth and improved shareholder returns over the medium term.’