Michael Gove’s ‘warehouse tax’ on online giants blocked by Treasury

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The political clashes reflect the challenge Mr Gove, Mr Sunak and Mr Johnson face as they try to shape and improve the upgrade plan.

The phrase was adopted in the December 2019 election to sum up Mr Johnson’s domestic reform agenda. It focuses on reducing geographical inequalities, but critics say it is ill-defined.

The government has long debated whether more tax could be obtained from internet giants such as Amazon and Google, to help struggling businesses.

This is not the first political clash between Mr Gove, in charge of leveling plans in September, and Mr Sunak, concerned about the scale of government borrowing.

For most discussions, the Treasury has made it clear that no additional spending beyond what was announced in the budget is available for the leveling stimulus.

The Telegraph reported earlier this year that Mr Gove’s hopes of announcing a new manufacturing white paper have been blocked by the Treasury as it would raise expectations of further spending to come.

There has, however, been speculation that the Treasury’s tough stance may ease.

Mr Johnson, Mr Gove and Mr Sunak have held regular meetings together to discuss possible new policies to be announced when leveling is relaunched.

The speech, which will be accompanied by a white paper, was expected before the end of 2021, then the end of January. It has now slipped into February.

The agenda is a central part of the Prime Minister’s bid to retain Labour’s former heartland seats in the Midlands and the North of England, dubbed the ‘Red Wall’, in the next election.

Mr Johnson has already lost a Conservative ‘Red Wall’ MP – Christian Wakeford, from Bury South, who defected to Labor this week.

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