07/07/2015 00:01 BST | Updated 06/07/2016 06:12 BST

Osborne 'To Relax Sunday Trading'

Shops could open for longer on Sundays under plans to be unveiled by Chancellor George Osborne, when he delivers his first all-Conservative Budget tomorrow.

Mr Osborne will unveil proposals to give elected mayors and councils the freedom locally to relax laws which prevent larger stores opening their doors for more than six hours.

The Treasury pointed to research by the New West End Company which found two extra hours in the capital alone would create nearly 3,000 jobs and generate over £200 million a year in additional sales.

Mr Osborne said online shopping trends suggested there was a "growing appetite" for Sunday trading in high streets and retail parks, and a trial of longer hours during the London Olympics had proved a success.

But the move was condemned by the Association of Convenience Stores, which said it would force small shops out of business, had seen overall sales fall 0.4% during the Games and was unpopular with the public.

It said a poll in February found 76% of the public supported the existing rules with 60% of those wanting change actually preferring stricter, rather than looser, restrictions.

Freed from the constraints of five years of coalition with the Liberal Democrats, Mr Osborne will use his second Budget of the year to show where he has found £12 billion of welfare savings promised in the Conservative manifesto.

He told MPs that with global economies braced for the impact of the Greek debt crisis, he would use the set-piece to show how the Government intends to "redouble our own efforts to put our house in order" with continued austerity measures.

Significant savings are expected to the system of tax credits brought in under the previous Labour government to top up the incomes of low-paid working families.

Mr Osborne is also going further than previously planned in cutting the benefits cap - currently set at £26,000-a-year - not just to £23,000 in London but to a still lower threshold in other parts of the country.

Savings of £250 million will be achieved by forcing 340,000 local authority and housing association tenants on incomes of £40,000 or more in London and £30,000 in the rest of England to pay a market, or near market, rent from 2017/18.

The £600 million-plus annual cost of providing free television licences to the over 75s is also being passed to the BBC from 2018/19 - with the broadcaster deciding whether the policy should continue after 2020.

It may in return be able to extend the licence fee to cover people watching via the online iPlayer and the licence fee is expected to rise in line with the consumer price index (CPI) measure of inflation.

The Budget is also set to include an end to inheritance tax on family homes worth up to £1 million - at an estimated £1 billion cost to the Exchequer - a key plank of the Conservatives' general election manifesto.

But Mr Osborne appears set to disappoint Tories calling for a cut in the top rate of income tax from 45p to 40p - insisting his priority is raising the tax free allowance to £12,500 and increasing the threshold for the higher rate to £50,000.

The Chancellor is reported to have significant "wiggle room" because of tax revenues around £15 billion higher than projected at the March budget.

Stockbrokers Hargreaves Lansdown said it also expected the Treasury to receive an additional £700 million this year - twice official expectations - in tax thanks to new pension freedoms.

Millions of over 55-year-olds have since April been able to cash in their pension pots rather than being forced to purchase an annuity and the firm said experience from the early months suggested Mr Osborne was set for a big windfall.

Sunday trading has long been a thorny issue, with pressure building to relax the 1994 Sunday Trading Act which allowed smaller shops to open all day but restricted those over 280 sq m / 3,000 sq ft to six hours between 10am and 6pm.

A review by the then Labour government in 2006 resulted in no change amid protests.

But the Treasury said Britain was out of step with international competitors - with Paris having recently relaxed its rules and New York imposing no controls.

Mr Osborne will present the proposed reforms - to be included in an Enterprise Bill in the autumn - as part of a push to devolve more powers from Whitehall.

"Even two decades on from the introduction of the Sunday Trading Act, it is clear that that there is still a growing appetite for shopping on a Sunday," he said.

'The rise of online shopping, which people can do round the clock, also means more retailers want to be able to compete by opening for longer at the weekend.

"But this won't be right for every area, so I want to devolve the power to make this decision to mayors and local authorities."

ACS chief executive James Lowman said: "Giving local authorities the responsibility for setting Sunday trading hours will lead to inconsistency and confusion for businesses and shoppers.

"In areas where large stores' trading hours are extended, we will simply see the same amount of trade spread over more hours and shifting from small stores to large stores, as was the case when the laws were suspended for the 2012 London Olympics, when overall retail sales actually fell.

"Existing Sunday trading laws are a popular compromise that balance the needs of consumers, shopworkers, small stores and families.

"The short period of time that small stores are open while large stores are shut is a crucial advantage for convenience stores, most of which are owned by small businesses.

"Liberalising Sunday trading hours would make some small stores unviable."