In the biggest shake-up of Sunday trading laws since the 1990s, Chancellor George Osborne wants to allow mayors and councils to determine for themselves what the rules should be in their areas.
The existing law prevents larger stores from opening for more than six hours. It was relaxed as an exception during the 2012 Olympics, resulting in a significant surge in sales.
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Mr Osborne has decided that decisions on similar relaxations of the law should be taken at a local level, so that areas which think longer opening hours would boost economic activity are free to go ahead.
The Budget is expected to announce a consultation on two proposals: devolving power over Sunday trading law to elected mayors, and also to local authorities.
The Chancellor said: ‘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. There is some evidence that transactions for Sunday shopping are actually growing faster than those for Saturday.
‘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.
‘This will be another part of my plan to ensure a truly national recovery, with our great towns and cities able to determine their own futures.’
Sunday trading laws allow all stores to open for six hours between 10am and 6pm, while small shops covering less than 3,000 sq ft can open all day.
Research by the New West End Company has shown that extending Sunday trading by two hours in London alone would create nearly 3,000 jobs, and generate over £200 million a year in extra income. Reform would bring Britain into line with its international competitors. For instance, Paris has recently relaxed restrictions on Sunday trading, while there are none at all in New York.
Under the Chancellor’s plans, which are expected to be taken forward in the Government’s new Enterprise Bill in the autumn, mayors and councils would be handed devolved powers to choose when stores in their areas open on a Sunday.
High street shops have been coming under growing pressure from online retailers, which now account for 11 per cent of retail sales overall – rising to 17 per cent in the month before last Christmas.