Prime Minister Andy Burnham has announced a 20 per cent cut to business rates for pubs, clubs and live music venues in England, a policy expected to save a typical pub around £1,100 annually from April next year. The cut will apply to nearly 32,000 hospitality businesses, but will not be available to the very largest live music venues.
The policy, which will cost approximately £100 million a year, forms part of Mr Burnham's aspiration to 'bring back hope' across the country and 'protect pubs and local high streets', he said.
Funding and details
The new policy will be funded through a review of reliefs for businesses that 'do not make a positive contribution to local communities', such as vape shops, and a crackdown on online marketplaces that do not comply with tax obligations, No 10 said. The Prime Minister had previously pledged to raise taxes on out-of-town warehouses for online giants such as Amazon to help pay for cuts to rates for hospitality firms.
The finer details on exactly how these measures will fund the cut are yet to be revealed. The Government has said exact details will be set out in the autumn Budget ahead of the cut coming in in April. A key Labour minister said there 'may be additional measures' announced to fund the relief.
Reactions
In a Downing Street press statement, a spokesperson said work had 'already begun' to reform the business rate system with the 5p cut in rates announced in Rachel Reeves' 2025 Budget. The 20 per cent cut also comes on top of the 15 per cent relief announced in January.
Chancellor of the Exchequer John Healey said: “Pubs, clubs and live music venues are at the heart of communities across the UK.” He added: “We are determined to bring back hope, give businesses the support they need and generate growth in every postcode.”
Chief Secretary to the Treasury Emma Reynolds insisted the plans were fully funded. She told Sky News: "This is fully funded, and it will be funded in a couple of major ways. Firstly, by looking at business rate reliefs on businesses that cause social harm, such as vape shops, and secondly by cracking down on those online businesses who are not paying VAT."
But the Conservatives have said Mr Burnham must set out the finer details. 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.”
Conservative deputy chairman and shadow crime and policing minister Matt Vickers also raised doubts, claiming it was 'the third unfunded spending commitment in three days'. He said: “When this Government came to office, those businesses were getting a 75 per cent reduction in their business rates. They took away the 75 per cent and now he’s telling them he’s giving them 20 per cent back, and he doesn’t know how he’s going to pay for it.”
Hospitality industry bosses have also reacted. The Music Venues Trust welcomed the move as 'an encouraging first step'. The British Beer and Pub Association said they were 'delighted'. Emma McClarkin, BPPA chief executive said: “We now look forward to working with Government to deliver permanent business rates reform so we can keep the pub in its rightful place; at the heart of our communities.”
Iain Hoskins, owner of Ma Pub Group in Liverpool, said an extra 20 per cent relief would go some way to 'chipping away' at rising costs but cast doubt on coverage. He said his bill was between £200,000 and £300,000 across his venues. A hotel owner, Steve Perez, said the cut 'won't make any material difference' after rates increased for some in April.
