Andy Burnham, the Mayor of Greater Manchester, has unveiled significant proposals aimed at reforming business rates, directly challenging the Labour party’s current policies. His plans include substantial cuts for pubs, cafes, and other small, family-run enterprises, alongside a potential reconsideration of employers’ National Insurance contributions. Burnham stated that Labour has "got it wrong on small businesses" and that his proposals are a response to the struggles faced by these vital community assets.
Key takeaways
- A 20% cut in business rates for pubs, clubs, and music venues.
- Raising the threshold for business rates for smaller independent hospitality, leisure, and retail companies.
- Consideration of reversing the increase in employers’ National Insurance contributions.
- Funding for these reforms through higher levies on large online warehouses and owners of empty high street properties.
Business rate cuts and support for pubs
Burnham’s plan proposes a 20% reduction in business rates for pubs, clubs, and music venues starting next year. This initiative goes beyond the government’s existing 15% cut for pubs announced earlier in the year. The British Beer & Pub Association (BBPA) has welcomed the proposal, with CEO Emma McClarkin stating that a further 20% cut would be a "real boost" and that raising the threshold would "make a real difference to high streets and livelihoods."
Support for small and independent businesses
For smaller, independent hospitality, leisure, and retail companies, Burnham’s plan involves raising the threshold for paying business rates. This measure, which has not been updated since 2017, aims to take many businesses outside the scope of the tax altogether. A taper system would also be implemented to prevent a sudden cliff edge in payments. Burnham expressed a strong desire to protect and support these family-owned businesses, describing them as the "heart and soul of this country."
Funding and broader policy critique
The proposed reforms would be funded by imposing higher levies on large warehouses operated by online firms, such as Amazon, and by targeting the owners of empty properties on high streets. Burnham openly acknowledged that his party had "fallen short" and "undervalued the contribution these businesses make." He also indicated a willingness to reconsider the increase in employers’ National Insurance contributions introduced in the 2024 budget, a move that has drawn criticism from within the Labour party.
Political context
These policy announcements come as Burnham is seeking to win the Makerfield by-election and has confirmed his intention to challenge Sir Keir Starmer for the Labour leadership if elected. Trade bodies like UKHospitality have called for a broader, sector-wide solution, including reduced VAT for hospitality businesses, to address the universal challenges facing local enterprises.
Sources
- Burnham pledges to review NICs increase and cut business rates for pubs | Labour, The Guardian.
- Andy Burnham pledges 20% cut in business rates for pubs, The Morning Advertiser.
- Andy Burnham makes new business rates pledge after government ‘got it wrong’, The Independent.
