MICHAEL Gove’s allies say he is ready to “go to war” with Chancellor Rishi Sunak over parts of his so-called “levelling up agenda”.

Gove, who became the Levelling Up Secretary in Boris Johnson’s Cabinet reshuffle earlier this year, wants to radically overhaul the commercial property tax system in England – effectively exempting high-street retailers from paying business rates.

The Tory minister reportedly wants to bring in the overhaul to allow for tangible change in “red wall” seats before the next General Election, and thinks it can be paid for via an online sales tax.

The National:

But Sunak is not sold on the idea of changing business rates – which bring £25 billion to Westminster every year – and is concerned about the impact of a new online tax.

Surveys have shown that some traditional high-street retailers are not interested in an online sales tax, given their own developing web presence.

“There is no consensus among retailers so [Sunak] is reluctant to do it,” a source in the Treasury told The Times.

Gove reportedly wants to see an increase in the threshold at which companies have to start paying business rates. It currently sits at £12,000, but Gove is said to believe raising it will help to develop areas in the north of England and the Midlands.

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Sources have indicated they expect a significant battle between Gove and Sunak over this issue.

“[Gove has] been asking officials to pull together a very obstinate position paper and said he wants to be stubborn and very truculent,” one government figure said.

Another suggested his desire to stand firm is motivated by his preference to side with Johnson in the ongoing row between Number 10 and Number 11.

Sunak has long been a favourite to take over from Johnson at the end of his tenure, although a new Conservative Home poll published on Monday showed his support has fallen among Tory members.