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Sunday trading hours will remain the same at present after MPs voted by 317 votes to 286, to dismiss the proposal. Religious leaders were against it too.
MPs voted by 317 to 286, a majority of 31, against proposals to increase Sunday opening hours from the current six-hour maximum. Twenty-six Conservative rebels joined forces with Labour and the Scottish National Party to vote against Chancellor George Osborne's plans.
The successful rebellion was led by David Burrowes, who laid an amendment to kill off the plans completely by striking them from the legislation.
“I HAVE LISTEN TO OUR CONSTITUENTS”
Speaking against the plans, Burrowes said: “We have a job to do in parliament, we don’t just devolve every decision out to our constituents.
“If we listen to our constituents … I have many shopworkers, many faith groups and many others saying: why are we doing this? Why are we trying to unpick something that’s fairly settled?
“That’s me listening to my constituents. But also we have important principles as well. Those are complex arrangements for Sunday trading and it’s a duty on us to look at it carefully, to consult widely and also scrutinise it fairly.”
Shadow business secretary Angela Eagle said the Government should now abandon "tawdry attempts" to force its plans through Parliament. The defeat is being seen as a bitter blow for Mr Osborne, who called for shops to be allowed to open longer on Sundays in his summer Budget.
He said allowing councils in England and Wales to decide whether larger stores should be able to trade longer could help "struggling" high streets compete with online retailers, who are open 24 hours a day, 365 days a year.
The Business Department estimated that extending Sunday hours would boost the UK economy by £1.5bn or more over 10 years.
However, Labour and the unions argued it would lead to an erosion of UK shop workers' pay and would fail to protect them if they did not want to work on Sundays.
“CHILDISH AND HYPOCRITICAL ACTIONS OF THE SNP”
Addressing MPs after the defeat, Business Secretary Sajid Javid said he had "respect" for those who opposed Sunday trading.
"However, I am extremely disappointed by the childish and hypocritical actions of the SNP," he said.
Asked whether the Government would now drop its plans altogether, he said the majority of English and Welsh MPs had supported the change. "It was denied because of the SNP," he added. "The only thing the SNP was interested in today was headlines."
The Federation of Small Businesses (FSB) said it was a "major win" for small businesses in England and Wales, and its members were "unconvinced of the economic case for relaxing Sunday trading rules".
CAMERON TRIED TO FACILITATE NEGOTIATION
Before the vote, David Cameron held talks with Conservative backbenchers in a bid to see off a rebellion.
With as many as 30 Tory MPs expected to vote against the proposals, the Government offered a last-minute concession limiting the changes to 12 pilot areas in England and Wales.
However, MPs were denied the opportunity to debate the compromise, after Speaker John Bercow declined to provide Commons time, saying the amendment had been submitted too late.
The defeat is the second of this parliament in the Commons for Cameron, and the first major one since his failure to win a vote on military action in Syria in 2013. His first loss of the parliament was a vote won by Tory Eurosceptics and Labour over the “purdah” rules governing the EU referendum in September.
RELIGIOUS LEADERS AGAINST SUNDAY TRADING
Church leaders from across the country wrote an open letter to the Government warning that allowing shops to stay open for longer on Sundays would "disrupt the rhythms of community life."
“As leaders of Christian communities England and Wales, we oppose the government’s plans to further deregulate Sunday Trading laws”, they said.
It was the first time since the plans were announced that the leaders of the country’s major Christian denominations joined forces to voice their opposition.