UK government announces business rates cut for pubs and venues

The UK government announced a 20 percent cut to business rates for pubs, clubs and live music venues, saying the measure is intended to help businesses facing higher costs.

The announcement is the third policy move since Andy Burnham became prime minister on Monday. The earlier announcements were a planned cap on most bus fares in England and the removal of value added tax from household electricity bills.

The business rates cut, a reduction in a local tax paid by firms, is expected to save about 32,000 hospitality businesses around £1,100, or $1,400, a year. It is estimated to cost public finances around £100 million a year. Ministers struggled to explain how it would be funded.

Burnham is under pressure to show he can deliver the revitalised economy Labour promised when it won power in July 2024 after 14 years in opposition. He succeeded Keir Starmer, who was ousted two years after leading Labour to a landslide election victory.

Ian Hoskins, owner of the Ma Pub Group in Liverpool, broadly welcomed the measure but told Sky News it was still a "drop in the ocean". He said a full reform of business rates and more money in customers' pockets for discretionary spending would help more.

Mark Davy, chief executive of the Music Venue Trust, called the measure an encouraging first step.

The British Beer and Pub Association says pubs are closing at a rate of around one a day. Hospitality businesses have faced higher costs, including energy and labour bills.

The main opposition Conservative Party said any support was welcome but called on Burnham to explain how he would pay for the measure, which is due to take effect in April 2027. Conservative crime and policing spokesperson Matt Vickers told GB News that it was the third unfunded spending commitment in three days. He said leisure, hospitality and retail businesses previously received a 75 percent reduction in business rates, and accused Labour of removing that reduction before offering 20 percent back.

Burnham wrote on X that the business rates cut would support high streets where growing numbers of small businesses have shut. He said he would not stand by while local spaces disappeared and were replaced by boarded-up windows and "For Sale" signs.

Separately, football pundit Gary Lineker was among 120 UK-based millionaires who signed a letter organised by the Patriotic Millionaires UK campaign group urging Burnham to raise their taxes. The letter said higher taxes on top earners could raise about £24 billion and said: "We want you to tax us. We can afford it."