Prime Minister Andy Burnham has defended limiting cuts to business rates to certain hospitality venues, saying pubs “need to know that the cavalry is coming”.
He said the 20% being knocked off rates for pubs, clubs and live music venues across England from April next year was a “first step” to help businesses.
Funding the relief
Gambling arcades as well as vape shops will see their business rate relief slashed to raise the £100 million a year to fund the move.
Some businesses “do real good,” he said as he visited The Hare pub in Harlow, Essex, which he said sits “right in the heart of the community”.
“But other businesses can cause social harm. So adult gaming centres on high streets can often bring real harm to communities. Then people will see the vape shops that often don’t add much to community life and cause other issues too.”
The changes will see businesses that cause “social harm” treated differently, he said.
“They will obviously pay higher rates to give the ability then to cut business rates for pubs and other venues that bring people together and bring wider benefits to high streets and communities.”
Broader measures
It comes amid a series of measures that his Government has brought in to provide “breathing space” to the public and businesses as they experience cost pressures.
The discount, which comes on top of a 15% cut announced in January, will apply to around 32,000 hospitality businesses.
It is expected to save a typical pub some £1,100 annually, but will not be available to the very largest live music venues.
Mr Burnham was asked why he did not go further and introduce a wider tax cut which would include other businesses like cafes and restaurants.
He told broadcasters: “This is a first step today, but it’s an important step. I made this commitment in the Makerfield by-election because we’re losing pubs. Pubs need to know that the cavalry is coming.
“You know, this is to me our heritage. It’s working class culture. Once pubs are gone, they don’t come back. So we’ve just got to signal what support when we can. That’s why I’ve made this early announcement. This is a significant cut to the business rates that pubs and other venues pay.
“It could make the difference for a number of venues that are struggling, and it was right to confirm it quickly because, as I say, so much good happens bringing communities together, and when these places have gone they don’t come back, and we can’t afford to lose any more.”
Chancellor's support
Chancellor John Healey meanwhile vowed to back UK businesses that have “felt really squeezed” and said he was “just as concerned about the cost of business as I am about the cost of living”.
Addressing business leaders in central London on Thursday, Mr Healey said: “My message to British businesses is quite simple: to British businesses, to British innovators, to British investors: I will back you as your Chancellor, and I’ll back you in financial services, in technology, in retail, in industry, in all parts of the economy.”
Like households, firms have been feeling a “lack of a breathing space”, he said.
Chief Secretary to the Treasury Emma Reynolds insisted the policy is fully funded, despite both sources of revenue being described as subject to review or consultation.
A crackdown on online firms that fail to pay VAT is also planned to fund the move.
She told Sky News: “There may be additional measures that we look at as well, but it is those two principal ways that we’re going to fund this business rate relief.”
Reactions
The Conservatives said Mr Burnham must detail how he will pay for his policies.
Tory shadow business secretary Andrew Griffith said: “Whilst any support for Britain’s hard-pressed businesses is welcome, once again this Government has been found wanting on both the detail and funding for this policy.”
The changes were largely welcomed by the sector, but some businesses questioned how much impact they would have, while those not covered called for further help.
The Music Venues Trust welcomed the move as “an encouraging first step” and said it would work with the Government to “ensure that all grassroots music venues in England are recognised and eligible”.
The British Beer and Pub Association said it was “delighted” and was eager to look ahead to “permanent business rates reform”.
Butlin’s chief executive Jon Hendry Pickup said: “We’re one of the largest employers in the communities this Government wants to support, investing in UK tourism and creating jobs in coastal economies.
“Businesses and resort operators making that contribution shouldn’t be overlooked simply because of their size.”
Ros Morgan, chairwoman of the Real Rates Reform Alliance, said the move was encouraging but urged further measures be taken at the budget.
She said: “Targeted support for a small number of sectors is not a substitute for fundamental reform.”
No 10 has said it will look to set out further reform to the wider business rates system, including small business rates relief, at the budget.
Approval rating
Meanwhile, the Prime Minister’s approval rating has jumped 10 points in a week to plus-13, polling from More in Common showed.
It means Mr Burnham has surpassed his predecessor Sir Keir Starmer’s post-election high of plus-11.
Mr Burnham announced a raft of ministerial appointments on Wednesday night, including Scottish Labour leader Anas Sarwar, who has been made a lord and minister in the Department for Business, Innovation, Science and Trade.
Lord Sarwar was among the first to call for Sir Keir to stand down earlier this year.
Meetings with devolved leaders
Later on Thursday, Mr Burnham will meet the leaders of Scotland and Wales for the first time since becoming Prime Minister when he travels to Glasgow.
Mr Burnham backs further devolution, but both First Minister of Scotland John Swinney and First Minister of Wales Rhun ap Iorwerth want independence for their countries.
The former Greater Manchester mayor said he will not be considering any referendums and is instead focused on delivering growth.
Ahead of the meetings, the Prime Minister said: “When I say we need good growth in every postcode, I mean every postcode across the whole of the UK. Every place and every person matters.
“I’m not focused on point scoring or discussing constitutional changes like referendums, I want practical measures to help people live well and bring back hope.”
Mr ap Iorweth said Scotland was a fitting location to meet “as it underlines Wales’s case for parity of powers and a fairer funding model that reflects our needs”.
The Prime Minister will also be at the opening ceremony of the 2026 Commonwealth Games on Thursday.
He is expected to meet with the First Minister and deputy First Minister of Northern Ireland on his tour of the United Kingdom in August, where he will visit places across England, Scotland, Wales and Northern Ireland.
