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Business rates will be cut by 20% for pubs, clubs and live music venues across London and beyond from April next year, Downing Street has announced.
The discount will apply to nearly 32,000 hospitality businesses and is expected to save a typical pub some £1,100 annually, but will not be available to the very largest live music venues.
The overhaul of business rates will be funded through a review of reliefs for businesses that “do not make a positive contribution to local communities” such as vape shops and a crackdown on online marketplaces that do not comply with tax obligations, No 10 said.
Prime Minister Andy Burnham had previously pledged to raise taxes on out-of-town warehouses for online giants such as Amazon to help pay for cuts to rates for hospitality firms.
Mr Burnham said: “I said I would protect pubs and local high streets – the beating heart of our communities – and that’s what we will do.”
Meanwhile, Gary Lineker is among 120 UK-based millionaires calling on Mr Burnham to impose higher taxes on their wealth in an open letter.
The “Proud to Pay” letter to the Prime Minister, organised by the Patriotic Millionaires UK campaign group, claims the money raised from higher taxes on wealth could be used to reduce inequality, support public infrastructure, and back small businesses.
It reads: “We want you to tax us. We can afford it.”
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Top chefs warn business rates cut 'won't make a difference'
Top chefs in the hospitality sector have warned that Mr Burnham’s cut on business rates “won’t really make a difference.”
TV chef Tom Kerridge said: "It doesn't go far enough but it does show that there is an understanding that hospitality needs a hand, especially smaller venues.”
Mr Kerridge launched a nationwide campaign earlier this month, calling for hospitality to be cut to 10 per cent.
Other chefs, such as Great British Menu winner Nick Beardshaw also branded the move as a “political manouvre”, explaining it was “an absolute drop in the ocean” when it comes to helping the hospitality sector.
Chef Tom KerridgePA Archive'We're bringing the North to the South' says Burnham
As Andy Burnham celebrated his decision to slash business rates for pubs, he poured a pint for his new Chancellor John Healey.
Handing Mr Healey a McMullen’s East Indian Pale Ale, the Prime Minister said: “There you go John.
“This is my thank you to you for being our Chancellor.”
Mr Healey replied that the drink had “almost a northern head” on it.
“We’re bringing the North to the South,” Mr Burnham replied.
‘We’re bringing the North to the South’, says BurnhamGettyLondon business chief calls for expansion of discount
Concerns continue to be raised about the effectiveness of Burnham’s 20% cut on business rates for pubs, clubs and live music venues.
Karim Fatehi, CEO of the London Chamber of Commerce and Industry, welcomed the cut, especially for London’s economy.
However, he added that the long-term solution must go beyond the current offering.
He said: “Firms across the capital, particularly SMEs, continue to grapple with high employment costs, inflationary pressures and an outdated business rates system that discourages investment in physical premises.
“Retailers, hotels, manufacturers, office-based businesses and other firms operating from bricks-and-mortar locations continue to face an unfair tax burden that makes it harder to hire, invest and grow.”
Karim Fatehi, CEO of London Chamber of CommerceLondon Chamber of CommerceBurnham defends funding concerns
Andy Burnham has defended concerns about funding his slashing spree.
In three days, the Prime Minister has vowed to scrap VAT on electricity bills, cap bus fares at £2, and slash business rates for pubs by 20%.
He told reporters that gambling arcades causing “harm to communities” would see their business rate relief slashed.
“This is funded from within a change to business rates, because you know you can’t see all businesses the same,” he said.
The Labour leader added: “They will obviously pay higher rates to give the ability then to cut business rates for pubs and other venues that bring people together and bring wider benefits to high streets and communities.”
'The cavalry is coming', says Burnham
Prime Minister Andy Burnham has said pubs should know “the cavalry is coming” as he described his plans to slash VAT for pubs, clubs, and live music venues.
He explained that this was just a “first step” in his plans for the sector.
“You know, this is to me our heritage. It’s working class culture. Once pubs are gone, they don’t come back. So we’ve just got to signal what support when we can. That’s why I’ve made this early announcement. This is a significant cut to the business rates that pubs and other venues pay,” he said.
Mr Burnham added that the UK cannot afford to lose any more pubs.
He described them as “the heart of the high street” and vowed to be a “defender” for them.
Mr Burnham has vowed to be the ‘defender’ of pubsGettyBusiness rates cut slammed by economists
Mr Burnham’s business rates shakeup has been slammed by economists.
Stuart Adam, senior economist at the Institute for Fiscal Studies, said: "‘Whatever the Government wants to achieve with the business rates system, this complex, ever-changing mish-mash of policies cannot be a sensible way to go about it.
"Business rates have gone from being one of the most stable and simple taxes in the system to one of the least. We seem to be moving ever closer to a system in which the government gives every business a score out of ten each year according to how much it likes the business that year, and sets its tax rate that year accordingly.
"A coherent view of what business rates is intended to achieve and how it should be designed to achieve that is sorely needed."
Prime Minister Andy Burnham has come under scrutiny for his latest business rate reformPABadenoch fears lack of UK co-operation with Israel under Burnham
Earlier today, Kemi Badenoch expressed worry about the UK’s relationship with Israel under Burnham.
The Conservative Party leader told a press conference: : “This excessive focus on what’s going on in Israel and Palestine is because that’s what their backbenchers are concerned about.”
New Prime Minister and Labour leader Mr Burnham recently apologised for his party’s initial response to the country’s actions in Gaza and said Labour must “do better”.
His newly appointed Defence Secretary, Wes Streeting, said this week that Israel had “fallen short” of the standards the UK should expect.
Ms Badenoch said: “Whether people like it or not, there are British citizens alive today because of intelligence that Israel gave us.
“I am very worried about a lack of co-operation because this Government wants to please its backbenchers.
“They need to do what is right for the country, not what is right for the Labour Party.”
Kemi Badenoch said she was worried about UK-Israel relations under BurnhamAFP/GettyPrime Minister joined by Chancellor of the Exchequer
The newly appointed Chancellor of the Exchequer has joined Andy Burnham as the pair enjoy a pint at the Essex pub.
The purpose of the visit is to spotlight what Mr Burnham’s government will be doing for the pub industry.
Prime Minister Andy Burnham (right) and Chancellor of the Exchequer John Healey during a visit to the Hare pub in HarlowPA
Prime Minister Andy Burnham during a visit to the Hare pub in HarlowPA
Prime Minister Andy Burnham drinks a beer during a visit to the Hare pub in HarlowPAAndy Burnham arrives at pub in Essex
Andy Burnham has arrived at a pub in Essex.
The new Prime Minister has paid a visit to the Hare pub in Harlow just hours after announcing a 20% cut to business rates for pubs, clubs and live music venues.
Prime Minister Andy Burnham drinks a beer during a visit to the Hare pub PAHow much will pubs save under Burnham's new discount?
Doubts have been raised about the discount announced by Downing Street this morning.
It is estimated that the average pub will save some £1,100 annually. But some have asked whether this is enough.
One hotel owner, Steve Perez, told BBC Radio 4 that the relief would not make any “material difference” and added that most pubs serve food, questioning why the discount has not been extended to restaurants.
Another pub owner, Iain Hoskins, said that only one of his five venues qualified for the 15% cut last year, because they didn’t have the word pub in their name.
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