Burnham challenges Labour’s small business policy with 20 per cent business rate cut

Greater Manchester mayor Andy Burnham has announced a policy proposal to reduce business rates for pubs, clubs, and music venues by 20 per cent for the upcoming year. The plan includes raising the threshold for business rates for smaller independent hospitality, leisure, and retail companies, potentially removing many from the levy entirely for the first time since 2017. Burnham described the move as a criticism of the Labour government's approach to small businesses, stating that "Labour have got it wrong." The plan exceeds the UK Treasury's recent 15% cut for pubs. Burnham, who is contesting the byelection with the intention of returning to Westminster to potentially challenge for the Labour leadership, acknowledged that his party has undervalued the contribution of family-owned businesses.

The proposal was released on a Friday, marking Burnham’s first major policy initiative during the Makerfield byelection. It aims to fund these cuts through higher levies on large online warehouses and empty high street properties. Burnham stated the proposals are funded by higher levies on large online warehouses (such as Amazon) and owners of empty high street properties. The plan includes a taper system to avoid a “payments cliff edge” for businesses near the new threshold. Burnham has previously been cautious about detailing specific policies to align with the Labour party’s election manifesto, but has now explicitly criticised the government’s stance.

The UK Treasury announced a 15% cut to business rates for pubs in England from 1 April, with bills frozen in real terms for two years, following a backlash against changes in Rachel Reeves’ November budget. The hospitality sector has warned of potential widespread closures and job losses due to higher business rates and increased minimum wage costs. Despite the support package, UK Hospitality, which represents the sector, said the majority of members still expected to pay more in business rates, saying 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”.

The mayor acknowledged previous wariness in discussing concrete policies due to a desire to focus on the current contest and avoid exceeding the Labour election manifesto promises. However, 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. “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.”

The Makerfield byelection was triggered after sitting MP Josh Simons stepped aside, hoping Burnham would take his place and challenge for the Labour leadership. Burnham confirmed his intention to return to Westminster if elected on 18 June, with the aim of potentially challenging Keir Starmer for the Labour leadership. 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.

The announcement was made during the Makerfield byelection campaign, with Burnham explicitly criticising the Labour government’s approach to small businesses. He confirmed his intention to return to Westminster if elected on 18 June, with the aim of potentially challenging Keir Starmer for the Labour leadership. The plan includes raising the threshold for business rates for smaller independent hospitality, leisure, and retail companies, potentially removing many from the levy entirely for the first time since 2017. A taper system would avoid a payments cliff edge.