Andy Burnham, the Mayor of Greater Manchester, has unveiled ambitious plans to slash business rates for pubs and other small, independent businesses. The proposals, announced during his campaign for the Makerfield by-election, represent a notable departure from current Labour party policy and aim to revitalise high streets across the country.
Key takeaways
- A 20% cut in business rates for pubs, clubs, and music venues.
- Raising the threshold for business rates for smaller hospitality, leisure, and retail companies, potentially removing many from the tax altogether.
- Funding for the cuts to come from increased levies on large online warehouses and owners of empty high street properties.
- Burnham has also expressed sympathy for reconsidering the increase in employers’ National Insurance Contributions (NICs).
A bold policy shift
Burnham’s proposals directly challenge the Labour party’s recent fiscal policies, with the Greater Manchester mayor stating, "Labour have got it wrong on small businesses." He acknowledged that the party has "undervalued the contribution these businesses make to our livelihoods and our communities." The plan aims to protect and foster the growth of family-owned businesses, which he described as the "heart and soul of this country."
Specifics of the proposed cuts
The proposed 20% reduction in business rates for pubs, clubs, and music venues is intended to provide immediate relief. For smaller, independent hospitality, leisure, and retail businesses, the threshold for paying business rates would be raised for the first time since 2017. A taper system would be implemented to prevent a sudden increase in costs for businesses just above the new threshold. Burnham suggested that these measures could provide an average boost of £5,000 for pubs in his constituency and potentially lift many high street businesses out of paying business rates entirely.
Funding the initiative
To finance these tax cuts, Burnham has proposed targeting the profits of large online firms, such as Amazon, by increasing levies on their warehouses. Additionally, he suggested measures against landlords who leave high street properties empty. This approach aims to shift the tax burden away from struggling local businesses and towards larger corporations and absentee property owners.
Broader economic considerations
Beyond business rates, Burnham also indicated a willingness to review the increase in employers’ National Insurance Contributions (NICs) introduced in the 2024 budget. He stated his sympathy with the view that the burden of these contributions was not the right decision, signalling a potential shift in Labour’s stance on employer taxes. The trade body UKHospitality welcomed the recognition of the issues facing high street businesses but called for a broader, sector-wide solution, including a potential reduction in VAT for hospitality businesses.
Political ambitions
The announcement comes as Burnham campaigns in the Makerfield by-election, having confirmed his intention to challenge Sir Keir Starmer for the Labour leadership if elected as an MP. His policy initiatives are seen as a way to differentiate himself and appeal to a wider base within the party and the electorate.
Sources
- Andy Burnham says pubs and farmers are taxed unfairly, The Telegraph.
- Burnham pledges to review NICs increase and cut business rates for pubs | Labour, The Guardian.
- Andy Burnham pledges to slash taxes on pubs, cafes and other small businesses if he becomes prime minister |
The Independent, The Independent. - Andy Burnham pledges 20% cut in business rates for pubs, The Morning Advertiser.
- Andy Burnham promises to cut business rates for pubs, Manchester Evening News.
