Andy Burnham announces tax cuts for pubs as Labour overhauls business rates
Tens of thousands of businesses across the country are expected to benefit from the cuts, which will save the typical pub an estimated £1,100 in the next financial year.
The overhaul of business rates 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.
Prime Minister Andy Burnham 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.
It marks another u-turn for the Labour Government, after former Chancellor Rachel Reeves’s announced plans in January for a 15% cut to this year’s bills, followed by a freeze for next year and the year after.
Speaking with Nick Ferrari at Breakfast, Chief Secretary to the Treasury Emma Reynolds told LBC that the planned VAT cut, which will cost around £100m a year, will be partly funded by reviewing current relief measures benefitting “anti-social businesses” - with vape shops in particular singled out by the government.
It comes after unveiling £2 caps to bus fares on Wednesday - a move funded by the scrapping of the Digital ID scheme, proposals that were later revealed to be completely unfunded, according to ousted Labour minister Darren Jones.
Mr Burnham said: “For too long, governments have stood by while cherished venues have disappeared from our local high streets. So today I am changing that.
"This government will back the businesses that people want to see in their communities. I said I would protect pubs and local high streets – the beating heart of our communities – and that’s what we will do. What we’re announcing today is just the start as we work to bring back hope across the country."
The Government will look to set out further reform to the wider business rates system, including small business rates relief, at the Budget.
It is the latest cost-of-living announcement to come from the new Prime Minister’s Government.
Yesterday, Mr Burnham told LBC his move to cap most single bus fares in England at £2 from next year will create a "fairer Britain".
The cap on fares outside of London will help millions with the cost of living crisis by slashing maximum fares by a third for the rest of 2027.
Writing exclusively for LBC Opinion, the new PM said the move is "putting money where it will make a real difference to people’s lives".
Chancellor of the Exchequer John Healey said: "Pubs, clubs and live music venues are at the heart of communities across the UK.
"They help make a place what we love. They bring people together, support local jobs and help keep high streets and town centres busy — which is why we will back them all the way.
"We are determined to bring hope back, give businesses the support they need and generate growth in every postcode."
Mr Burnham has made Scottish Labour leader Anas Sarwar a lord and minister in the Department for Business, Innovation, Science and Trade as part of a raft of ministerial appointments on Wednesday night.
Lord Sarwar was among the first to call for Sir Keir Starmer to stand down earlier this year.
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 the First Minister of Wales Rhun ap Iorwerth, want independence for their countries.
The former 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.”
The First Minister of Wales said: “I look forward to meeting the Prime Minister in Glasgow today.
“It is fitting that we meet in Scotland, as it underlines Wales’s case for parity of powers and a fairer funding model that reflects our needs.
“Number 10 North must not become just Whitehall with a different postcode.
“I agree wholeheartedly on empowering communities – it’s at the heart of my politics – but decisions affecting Wales should be made in Wales, and it is for the Welsh Government and our Senedd to work with the people of Wales on how power is exercised and shared within our nation.
“At a time when families are still feeling the pressure of the cost of living, I am also keen to discuss how our governments can work together as equal partners to deliver improvements to the lives of people in Wales.”
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.
Technology & Business Editor
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