Andy Burnham cuts business rates for pubs in England
Prime minister Andy Burnham has announced a 20% business rates cut for pubs, social clubs and live music venues across England, in one of his first major moves to support high street hospitality.
The government said the new business rates cut would come into effect from April 2027 and benefit nearly 32,000 venues, saving the typical pub an estimated £1,100 in the next financial year.
The move follows weeks of growing focus on Andy Burnham’s support for hospitality, with The Staff Canteen previously reporting that chefs and industry bodies were watching closely to see whether his leadership would lead to action on tax reform.
Andy Burnham was officially appointed prime minister earlier this week.
But while the business rates announcement has been welcomed as an important first step, restaurants and hotels have raised concerns that they have again been left without direct support.
The BBC reported this morning that frustration was growing among hotel and restaurant owners, with pubs now receiving two rounds of relief while hotels and restaurants had received nothing.
According to the BBC, when business rates were recalculated in April, pubs were facing an average rise of 76% over the next three years, while hotels were looking at a 110% rise.
The BBC also reported that restaurants and hotels employ 2.7 million of the 3.5 million people working in hospitality.
Business rates cut for pubs
The government said the package formed part of its plan to support local high streets, reduce pressure on community venues and help businesses invest, grow and create jobs.
The changes will be fully funded, including through a review of reliefs for businesses the government said did not make a positive contribution to local communities, such as vape shops.
The government also said it would crack down on businesses that sell through online marketplaces but do not comply with tax obligations, with revenue raised from reforms reinvested into the business rates system.
Andy 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 package is worth around £100million a year.
Tom Kerridge: ‘It doesn’t go far enough’
Chef and restaurateur Tom Kerridge, who has been leading the VAT’s The Problem campaign calling for hospitality VAT to be cut from 20% to 10%, said the announcement showed government was beginning to listen, but warned the measure would not be enough on its own.
Speaking to BBC Radio 5 Live, Tom said: “It doesn't go far enough but it does show that there is an understanding that hospitality needs a hand, especially smaller venues.”
He added: “It will come as welcome news. But £1,000 on a yearly revenue doesn't really make a difference.
“But it shows the government are beginning to listen and has an understanding that hospitality is at the core and heart of so many communities.”
Tom said he had spoken to Andy shortly before he became prime minister and remained hopeful that more support could follow.
He said: “I'm hopeful that as the prime minister and his team begin to get their feet underneath the table and they get to have an understanding on what's going on, that there will be more and more measures that come into place to help hospitality.”
The comments follow The Staff Canteen’s previous interview with Tom, in which he backed Andy as a political figure with a strong understanding of hospitality and its role in regeneration, jobs and communities.
Tom previously told The Staff Canteen: “Andy Burnham, as mayor of Greater Manchester, has been a part of that.
“He's also said many times that hospitality VAT is an area of big concern and needs to be reduced.
“He is behind hospitality reduction in VAT. He's talked about it.”
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Hospitality reacts to Andy Burnham arrival
Simone Tattersall, operations manager at The Gunton Arms, said she hoped the appointment marked the start of a government that understood hospitality’s wider value.
She said: “My biggest hope is that prime minister Andy Burnham sees hospitality as one of the UK's most important industries, rather than simply a source of tax revenue.
“Hospitality isn't asking for special treatment. We simply want a fair chance to run sustainable businesses, create jobs, support our local communities and continue showcasing the best of Britain to visitors from home and abroad.
“I really hope this government chooses to work with the industry because, with the right support, hospitality has the potential to contribute so much more to the UK economy.”
Michelle Ovens CBE, CEO and founder of Small Business Britain, said the move was encouraging for high street businesses more widely.
She said: “It's encouraging to see the prime minister announce business rates cuts for pubs, social clubs and live music venues, which are important anchors of our local high street. Many of the UK’s 5.7 million small businesses are based on our high streets, and this should be the start of wider support for businesses that are so vital to our local communities.
“While the summer can provide a welcome boost for many high street businesses, it also brings additional pressures.
“As we head towards the final quarter of the year, it's positive to see the prime minister’s commitment to supporting businesses people want to see on their high streets, and we look forward to seeing that commitment backed by continued investment that enables local businesses and the communities they serve to thrive.”
Sam Harrison, co-founder of Genuine Restaurants Group, said hospitality would still be looking for action on VAT.
He said: “I would love to see a new energy going forward. I hope that our new PM and Chancellor both have a real understanding of the situation the hospitality industry currently finds itself in.
“Above all, we are hoping to see the 10% cut in VAT that the industry has been campaigning for.”
UKHospitality: ‘Neither hotels nor restaurants have had the help they need’
UKHospitality welcomed Andy becoming prime minister earlier this week, saying the sector could be a key partner in unlocking growth and employment if backed by urgent tax reform.
Allen Simpson, chief executive of UKHospitality, said: “We congratulate Andy Burnham on becoming prime minister and welcome his commitment to building the economy, supporting young people into work and creating growth that reaches every part of the country.
“Hospitality is uniquely placed to deliver these ambitions. As one of the UK’s most socially productive sectors, we provide millions of jobs, offer first career opportunities for young people, help people back into work and support communities across the country.
“Our sector is an economic powerhouse with huge opportunity, but that potential is being constrained by a significant tax burden. A permanent reduction in hospitality VAT to 10% would not only unlock investment and job creation, but also help make hospitality more affordable for consumers. Alongside lower business rates and reduced employment taxes, it would help deliver the growth the prime minister wants to see.”
Speaking to BBC Breakfast this morning, Allen said the latest announcement did not solve the wider issue for hospitality.
He said: “Neither hotels nor restaurants have had the help they need. We've got to see a proper solution for the most overtaxed sector in the economy at this year's budget.”
VAT campaign continues
While the business rates announcement is likely to be welcomed by pubs, clubs and live music venues, pressure will continue for wider support across hospitality.
The government said it would return to wider business rates reform, including Small Business Rates Relief, at the Budget.
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.”
VAT’s The Problem has now passed 290,000 signatures, with a target of one million.
For operators across restaurants, pubs, cafes, hotels and bars, today’s announcement marks a significant first step, but not yet the sector-wide support hospitality leaders are calling for.
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