Andy Burnham has proposed a 20% cut to business rates for pubs with many smaller, family-run enterprises taken out of paying the levy altogether, in his first major policy initiative during the Makerfield byelection.
Burnham’s plans amount to a notable criticism of Keir Starmer’s policy in the area. The Greater Manchester mayor said: “Labour have got it wrong on small businesses.”
He has been wary of discussing concrete policy decisions, in part because of a desire to focus on the current contest, but also because he has said he would not want to go beyond what Labour promised in its election manifesto.
But in a policy statement released by his team on Friday, Burnham acknowledged criticism of the government’s policies towards small businesses, and particularly pubs, pledging help on business rates.
Under his plan, pubs, clubs and music venues would receive a 20% cut next year, while smaller, independent hospitality, leisure and retail companies would have the threshold for paying business rates raised for the first time since 2017, taking many outside the scope of the tax. A taper system would avoid a payments cliff edge.
The cuts would be paid for, according to the proposal, by higher levies on giant warehouses operated by online firms such as Amazon, and targeting the owners of empty high street properties.
“I am willing to be honest about where we have fallen short and say that my party has got this wrong in government,” Burnham said in the statement. “They have undervalued the contribution these businesses make to our livelihoods and our communities.
“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.”
The proposals go further than a Treasury plan announced in January for a 15% cut to business rates for pubs in England from 1 April, with bills then frozen in real terms for a further two years.
It followed a backlash in the hospitality sector against changes to business rates announced in Rachel Reeves’ budget in November with warnings of potentially widespread closures and job losses, particularly in pubs.
Despite the support package, UKHospitality, which represents the sector, said the majority of members still expected to pay more in business rates and that this on top of a higher minimum wage could lead to job cuts.
Responding to Burnham’s proposals, the trade body said it was correct to recognise that the current system did not work, but that any effective policy should also take in ideas such as reduced VAT for hospitality businesses.
Burnham is hoping to return to Westminster in the byelection on 18 June, a contest triggered after the sitting MP, Josh Simons, stepped aside in the hope that the Greater Manchester mayor would take his place and go on to challenge Starmer for the Labour leadership.
Speaking during a BBC Question Time special on Thursday evening, Burnham confirmed that this was his intention if elected. He said the former health secretary Wes Streeting appeared to want to challenge Starmer, and if that happened “I would seek to join it”.
