Former Sainsbury’s chief executive Justin King has said business rates for retailers should be halved and VAT increased to 22% in a bid to save the flagging high street.

King told the Radio 4’s Today these measures would help level the taxation playing field for bricks-and-mortar retailers battling pureplay competition.

He said: “The services that those business rates pay for are used by online retailers. 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.”

King, who is now a non-executive director at Marks & Spencer, said his proposals would ease the burden on retailers, without increasing prices for consumers at the tills.

“Retailers on 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,” he added.

King’s intervention follows the publication this week of the Treasury committee’s long-awaited report into business rates.

Lead member of the inquiry Alison McGovern MP said the report showed that the current business rates system is “broken” and represented an “increasing burden on businesses, particularly those with a physical high street presence struggling to remain competitive”.

Last month, the BRC estimated that 85,000 high street retail jobs had been lost in the past year.

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