Kingfisher chief executive Ian Cheshire has called on the government to consider extending VAT to food and other exempt items if an increase in the tax is implemented.

Cheshire told the Financial Times: “If there is a decision that some form of VAT increase is necessary, and that is quite a big if, then I would be saying I think there is a case for looking at a broader application of VAT rather than just simply whacking the standard rate up.”

Cheshire’s view contrasts with that of Sainsbury’s chief executive Justin King, who recently urged the new Government to resist charging VAT on food. Tesco has also warned against this.

Cheshire added: “There is a question … which says, ‘Does it really have to be that the standard rate goes from 17.5 per cent to 20 per cent, or do you have to look at a broader base of VAT, food and other stuff?’

“Is there a case for saying, actually, VAT needs to go up, but let’s look at how it goes up, because otherwise you are going to get this extraordinarily focused VAT burden, which I think is a little bit debatable at best.”

Food, children’s clothes, books, newspapers and magazines are among the products that are all exempt from VAT currently.

Some retailers are already making preparations for a VAT increase from 17.5% to 20%, with fashion chiefs set to hike prices up by 8% for autumn as they contend with volatile currencies, higher commodity costs and an expected VAT rise.

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