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Andy Burnham is expected to announce a £1bn raid on Amazon and Asos to pay for a pubs tax break.
In a blow to online retailers, the Prime Minister is expected to raise business rates for fulfilment warehouses to pay for cutting rates for pubs, clubs and live music venues by 20pc.
The policy announcement is expected in the coming days, according to the Huffington Post.
It came after Mr Burnham said last month that out-of-town warehouses, which act as deployment centres for the likes of Amazon and Asos, should face higher business rates to lower the levy on hospitality venues.
He has also reiterated his pledge to expand small-business rates relief for small firms from 50pc to 100pc.
Mr Burnham said: “I believe there is a case for higher business rates on warehouses and the major developments we see on the outskirts of our cities, so we can cut business rates for pubs – I proposed a 20pc cut – and lift some high street businesses out of business rates altogether.”
Calculations by Ryan, the global tax firm, show that cutting business rates for pubs, clubs and live music venues by 20pc would cost £133m.
On top of a larger rates overhaul to support small high-street firms, which could run to around £880m a year, the policy would cost more than £1bn.
‘Higher costs for the consumer’
Raising business rates on warehouses and out-of-town developments has previously been suggested by Mr Burnham as a way to fund the tax break for pubs.
According to Ryan, Mr Burnham could change the formula used to calculate business rates to hit warehouses with higher tax bills.
The UK Warehousing Association, the trade body for the sector, wrote to Mr Burnham on Monday warning him against imposing higher business rates on warehouses and major out-of-town premises.
Clare Bottle, the chief executive of the trade body, said: “Business Rates have become grossly complex, prone to unpredictable swings and now act as a major inhibitor to investment.
“The Prime Minister’s proposal would make a bad situation even worse. Endless tweaking of thresholds and reliefs, supposedly paid for by warehouse of ‘online giants’, will only mean more money for valuation consultants and higher costs for the consumer.”
Ms Bottle added that changes to business rates under Sir Keir Starmer had been “particularly punishing”.
The British Retail Consortium (BRC) warned against increasing business rates on warehouses, saying that it would impact high street stores who receive goods from distribution centres.
Helen Dickinson, the chief executive of the BRC, said: “Retail pays the largest share of business rates in the country, levied on every part of the industry, from high street and retail park stores, to warehouses and distribution centres.
“Funding rates reform by adding even more taxes to an already overburdened industry will ultimately mean struggling families foot the bill through higher prices.”
She added that business rates are a major force pushing up costs paid for by customers.
The Treasury was contacted for comment.
