Shadow local government minister Bob Neill has launched a stinging attack on his junior opposite number Sadiq Khan for reneging on a deal to help struggling small firms.
The move was designed to cut councils’ administrative costs.
Mr Luff introduced a private member’s bill to introduce automatic take-up of the relief.
In a parliamentary debate last month, he said that after “constructive discussions” with Mr Khan, the bill had been withdrawn at his request. But the Budget contained no measures on the relief, leading Mr Neill to criticise Mr Khan’s conduct.
“I’m bitterly disappointed that the government has broken faith with Parliament,” Mr Neill said.
“Mr Khan made favourable and soothing noises on the basis of which Mr Luff withdrew the bill. In the Budget? Not a thing.”
The Local Government Association estimates 40% of small businesses are missing out on financial support to which they are entitled.
A Department for Communities & Local Government spokesperson insisted: “It’s not true to say that we have reneged on any ‘deal’.”