Former Sainsbury’s boss: Halve business rates and raise VAT to save high street
Jasper King, the former head of supermarket giant Sainsbury’s, has called for business rates to be halved and VAT increased to help high street retailers compete with their online rivals.
Speaking to BBC Radio 4’s Today Programme, King said it was unfair that bricks and mortar retailers were forced to pay the rates when their online competitors are not.
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“The services that those business rates pay for are used by online retailers,” said King, who led Sainsbury’s for ten years before stepping down in 2014.
“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.” he added.
The government is facing calls to introduce measures to help revitalise Britain’s struggling high street. The Commons’ Treasury yesterday called for the government to rethink the business rates system, which it branded “unfair” and “broken”.
King said that VAT could be increased two per cent in order to cover the shortfall from halving business rates, and that the move would not change prices for consumers buying from high street retailers.
“Retailers in our high streets up and down the country pay business rates, that’s passed onto consumers in pricing,” he said.
“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.”
In the interview, King also spoke out in support of Asda – where he previously worked – which has told 100,000 staff they face being sacked if they do not sign new employment contracts.
“All legacy retailers – and Asda are one – have some legacy arrangements with their workforce which simply don’t reflect the modern world that we’re in,” he said.
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King said the working practices of some online retailers were “almost Victorian”, but added that their competitiveness was challenging traditional firms.
“Many online retailers don’t pay their workers anywhere near as well as the mainstream retailers.”