Andy Haldane, the former chief economist at the Bank of England, has publicly urged the UK government to implement a higher tax rate on online sales compared to traditional brick-and-mortar shops. The proposal is intended to address the decline of high streets across the country, where many businesses have been forced to close due to changing consumer habits and the rise of e-commerce.

Haldane’s recommendation comes as Prime Minister Keir Starmer and Chancellor John Healey finalize the details of their first budget, scheduled for next week. The call for an online sales tax is framed as a measure to “level the playing field” for physical retailers who face higher overhead costs, such as business rates and rent, which online-only competitors often avoid or manage differently.

While the proposal is presented as a potential solution to revitalize town centers, it remains a subject of debate among economists and policymakers. Proponents argue that the current tax system unfairly penalizes physical stores, while critics often point to the potential for such taxes to increase costs for consumers or stifle digital innovation. As the government approaches its budget announcement, the pressure to find a sustainable model for the future of British retail continues to mount.