Sainsbury’s chief executive Justin King has urged the government to freeze National Insurance contributions and provide adequate time for the implementation of a VAT hike.

He issued the warning ahead of next week’s emergency Budget, which is expected to see the government implement deep spending cuts in a bid to tackle the country’s deficit. VAT could also rise to 20%.

The Sainsbury’s boss said the last VAT change from 17.5% to 15% implemented by the Labour government had been “unbelievably disruptive” for businesses due to insufficient lead-time.

He also repeated warnings made during the election campaign that increasing employers’ NI contributions would stifle the creation of jobs.

Spending cuts rather than tax hikes would be the most effective way of tackling the UK deficit, he argued.

“The private sector is bearing the brunt of the tax rises,” he said. “Given that £1 in every £4 of the government spend is borrowed [addressing the deficit] sooner rather than later is always better.”

He added: “The government is spending money it hasn’t got. It should spend that money wisely.”

King made the comments as Sainsbury’s unveiled a modest rise in like-for-like sales for the first quarter – up just 0.3% excluding fuel and the effects of VAT.

King said stores purchased from the Somerfield chain were performing better than expected. He added that non-food would “continue to lead the charge” in the chain’s expansion, which include plans for 1.5m sq ft of new retail space this year.

Sainsbury’s expects to add at least 1.25m sq ft per annum over the next three to four years.

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