Prime Minister Andy Burnham has announced a new policy that will cut business rates for pubs, clubs and live music venues across England by 20 per cent from next April, saving around 32,000 hospitality businesses an average of £1,100 a year.
The discount, which Downing Street said would cost about £100 million annually, will not apply to the very largest live music venues. The funds are planned to be raised by cutting business rate relief for vape shops and cracking down on online businesses that fail to pay VAT.
Support for 'cherished local spaces'
Mr Burnham said it was time to support vanishing “cherished local spaces” with his business rates reduction. Writing on X, he said: “I’m giving thousands of pubs, clubs and music venues a 20% cut in business rates. I won’t stand by while these cherished local spaces disappear, replaced by boarded-up windows and ‘For Sale’ signs. They’re the heart of our communities and it’s time we backed them.”
The former Greater Manchester mayor promised to slash business rates if elected during his Makerfield by-election campaign. Since entering Downing Street on Monday, he has also unveiled plans to remove VAT from electricity bills and reinstate a £2 cap on single bus fares across England.
Chancellor's backing for businesses
Chancellor John Healey 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, he 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.
Funding the policy
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. 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.” Speaking to LBC, Ms Reynolds said vape shops were being targeted because they cause “social harm” and online firms were failing to comply with their tax obligations. She said: “At the moment, vape shops, like other shops on the high street, get business rate relief. We don’t think that is fair because these businesses do cause social harm. So we will look to raise some revenue by reviewing that relief, and then also on the VAT, online businesses are often charged VAT, but they’re not paying that VAT. They’re sort of getting around the rules. So we’ve got a consultation out on that at the moment about how we fix that, and that would also raise some revenue.”
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. Meanwhile, the Prime Minister’s approval rating has jumped 10 points in a week to plus-13, polling from More in Common showed, surpassing his predecessor Sir Keir Starmer’s post-election high of plus-11.
