New Prime Minister Andy Burnham is set to confirm a 20% cut in business rates for the hospitality sector within days, according to reports. The move, which targets pubs, clubs and music venues, forms part of his first major economic intervention since succeeding Sir Keir Starmer on Monday.
Rate cut details and threshold changes
Under the plan, hospitality venues will receive a 20% reduction in business rates next year. Smaller independent hospitality, leisure and retail companies will see the threshold for paying business rates raised for the first time since 2017, removing many from the tax entirely. A taper system will be introduced to avoid a sudden payments cliff edge.
During the Makerfield by-election campaign last month, Burnham said he wanted to cut business rates for pubs, clubs and music venues by 20% and raise the threshold for independent firms. The policy will be funded by increasing rates on large, out-of-town warehouses used by companies like Amazon.
Funding and cost of living measures
Burnham stated: "Our high streets matter to me because they matter to the people who live here. I want to make sure that these family-owned businesses, as the heart and soul of this country, are protected and given the chance to thrive." A source close to the PM said they would not "get ahead of the announcement."
The hospitality rate cut comes alongside an £850m tax reduction on electricity bills, announced as Burnham's first significant policy. Electricity bills will fall by an average of £45 a year from October. Downing Street said the move will be partly funded by scrapping Starmer's digital ID scheme, which was estimated to cost £1.8bn over three years.
