Tourist hotspots reliant on the hospitality, leisure and retail sectors are in danger of seeing their high streets “hollowed out” if coronavirus support is scaled back, Labour has warned.

Shadow business secretary Ed Miliband has urged ministers to extend the current tax relief available to avoid England’s third lockdown from creating a host of ghost towns.

The party is warning of devastation in areas such as the Isles of Scilly, where Labour calculates that as much as 44% of businesses rely on visitor, retail and hospitality trade.

According to Labour analysis of Office for National Statistics (ONS) data, a fifth of businesses are in the same position across the rest of Cornwall, in Devon’s Torbay and in the Isle of Wight, while 17% of those in Brighton and Blackpool are also retail, tourism or hospitality reliant.

Labour is urging the Government to confirm it will extend the 100% business rates holiday for retail, hospitality and leisure businesses for at least another six months.

The Opposition party also wants the reduced rate of VAT for businesses in the hospitality, tourism and culture sectors to continue and is calling for businesses to be given greater flexibility to manage debt, including using student loan-style arrangements.

The reduced VAT rate is set to expire on March 31, when it will return to 20%.

Mr Miliband said: “We are facing a national economic crisis, but it’s clear that if high street businesses like restaurants, hotels, shops and salons go bust the impact will be felt much more deeply by communities in certain parts of the country.

“It’s striking that before Covid these places, from Cornwall to Cumbria, were bustling with tourism and trade. Businesses were supported by visitors and local people – and they will be again when our economy can open up.

“Standing by and letting these businesses collapse with the vaccine rollout making huge progress and recovery in sight would be absolutely devastating for business owners and employees who have done the right thing by shutting to help tackle the virus.

“The Government must stand up for local high streets and abandon the sink or swim approach. They must urgently confirm they will extend business rates relief to give struggling businesses the breathing room they need.

“We cannot allow these places to be hollowed out.”