Andy Burnham expected to announce 20% business rates cut for hospitality

Prime minister Andy Burnham is understood to be preparing a 20% cut to business rates for hospitality businesses, with the policy expected to be announced within days.

The move follows Burnham’s pledge at the end of June to reduce business rates for pubs, clubs and music venues if he became prime minister. He also promised to raise the business rates threshold for independent hospitality, leisure and retail businesses.

At the time, hospitality operators reacted with cautious optimism to Burnham’s victory in the Makerfield by-election. Some described him as “a fantastic advocate for hospitality”, while others said they will look for “proof in action taken”.

But now new reports suggest the business rates reduction will form part of a series of policy announcements as Burnham enters Number 10.

The cuts are reportedly set to be funded by increasing business rates on large out-of-town distribution warehouses operated by companies such as Amazon, shifting more of the tax burden onto major online retailers.

While a reduction in business rates would provide welcome relief for hospitality operators, many businesses will also be looking for further commitments on VAT. Burnham has previously backed reducing the hospitality VAT rate to 10%, bringing the UK more closely into line with several European countries, although he has yet to make a formal commitment.

Chef Tom Kerridge, who spearheaded the VAT’s the Problem campaign, which attracted more than 270,000 signatures in support of cutting hospitality VAT to 10%, has backed Burnham and previously described him as receptive to the sector’s concerns.

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