The UK government has announced a 20 per cent cut in business rates for struggling pubs, clubs and live music venues, as newly appointed Prime Minister Andy Burnham moves to tackle the country’s cost of living crisis.
The measure, announced on Thursday, is the third major policy unveiled since Burnham became prime minister on Monday. It follows plans to cap most bus fares in England and scrap value added tax (VAT) on household electricity bills.
The business rates reduction is expected to benefit around 32,000 hospitality businesses, saving each an average of £1,100 annually. However, ministers have yet to explain how the estimated £100 million yearly cost of the scheme will be financed.
Burnham faces mounting pressure to revive the UK economy after Labour returned to power in July 2024, ending 14 years of Conservative rule. The government says the tax relief is aimed at supporting high streets and easing financial pressure on businesses hit by rising energy, labour and operating costs.
Ian Hoskins, owner of the Ma Pub Group in Liverpool, welcomed the announcement but described it as only “a drop in the ocean”, saying a complete overhaul of the business rates system and stronger consumer spending would provide greater support.
Mark Davy, chief executive of the Music Venue Trust, also described the move as “an encouraging first step” for the struggling hospitality and live entertainment sectors.
According to the British Beer and Pub Association, pubs across the UK are closing at a rate of about one every day, reflecting the financial challenges facing the industry.
The opposition Conservative Party questioned how the government intends to fund the tax cut. Conservative crime and policing spokesperson Matt Vickers argued that Labour had previously removed a 75 per cent business rates discount before announcing the new 20 per cent relief.
Burnham defended the policy, saying on X that it would help preserve Britain’s high streets and protect community spaces from closure.
“I won’t stand by while these cherished local spaces disappear, replaced by boarded-up windows and ‘For Sale’ signs,” the prime minister said. “They’re the heart of our communities, and it’s time we backed them.”
Meanwhile, former England footballer and broadcaster Gary Lineker joined more than 120 wealthy UK residents in signing the “Proud to Pay” letter, organised by Patriotic Millionaires UK, urging the government to increase taxes on the country’s richest earners. The campaign claims higher taxes on top earners could generate about £24 billion in additional revenue.
