Sainsbury's ex-boss urges VAT rise to save High Street

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Business rates should be halved and VAT increased to 22% in a bid to save the High Street, former Sainsbury’s boss Justin King has said.

This would help retailers battling with online rivals who do not face the same tax burden, he said.

He told the BBC’s Today programme it was unfair that only bricks-and-mortar retailers paid business rates.

“The services that those business rates pay for are used by online retailers,” Mr King said.

“They drive on the roads that are maintained by them, the brown cardboard boxes they deliver are collected by dustmen or taken to tips paid for by those business rates.”

No price change

He said it would not change prices for consumers buying from High Street shops.

“All taxes are paid by consumers,” he said.

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The British Retail Consortium estimates 85,000 high street jobs have been lost

“Retailers in our High Streets up and down the country pay business rates, that’s passed on to consumers in pricing.

“So if they see a reduction in their business rates but VAT has gone up – and that is of equivalent value – you won’t see any price moves at all.”

Closed Coast

The government is facing calls to overhaul its High Street policies after estimates were made of 85,000 retail sector job losses compared with a year ago.

The British Retail Consortium made the calculation after finding that the number of retail employees in the third quarter fell by 2.8% on a year earlier.

This is the 15th consecutive quarter of year-on-year decline, the BRC said.

The figures are released at a time when shops are closing on the High Street, with clothing retailer Karen Millen and Coast among the recent outlets to shut.

In July, the proportion of all shops that are empty reached 10.3%, its highest level since January 2015, according to a BRC and Springboard survey.

The BRC used data from the Office for National Statistics to calculate that a 2.8% fall in jobs in the third quarter was the equivalent of 85,000 jobs being lost in a year.

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