Andy Burnham faces criticism over business rates cut for hospitality sector
Andy Burnham’s pledge to reduce business rates for pubs, clubs, and live music venues has drawn significant criticism, with industry leaders asserting that the measure falls short of what is necessary, reports BritPanorama.
On Thursday, Mr. Burnham announced a 20 per cent reduction in business rates, claiming it would assist approximately 32,000 businesses and save the typical pub around £1,100 annually. This marks his third significant policy rollout in just three days, viewed as part of a broader initiative to alleviate financial pressures on the hospitality industry.
The announcement sparked immediate backlash, particularly from celebrity chef Tom Kerridge, who described the savings as unlikely to impact the sector meaningfully. Kerridge has previously mounted a campaign advocating for a reduction in hospitality VAT, indicating broader dissatisfaction within the industry regarding the proposed support.
Kerridge stated, “It doesn’t go far enough but it does show that there is an understanding that hospitality needs a hand, especially smaller venues.” This sentiment was echoed by Great British Menu winner Nick Beardshaw, who branded the initiative a “political manoeuvre,” stating that it represented an “absolute drop in the ocean” in the context of industry needs.
Beardshaw expressed concern that the proposed reductions would fail to prevent business closures, predicting a bleak outlook for many establishments by April when the policy is anticipated to take effect. He remarked, “Not enough to save any businesses, as is implied in his statement about not wanting to see any more of these businesses boarded up.” This aligns with concerns that the reduction constitutes only a minimal percentage of enduring operational costs.
Mr. Burnham acknowledged the need to protect “cherished local spaces” as he unveiled the proposal during a wider effort to provide financial relief amid rising costs. The measure, expected to cost around £100 million annually, is intended to be funded through cuts to business rate relief for vape shops and enhanced enforcement of VAT compliance for online businesses.
Nevertheless, the response from industry leaders has been predominantly critical. Steve Perez, founder of Global Brands and owner of two hotels in the Peak District, labeled the rate cut “tiny,” suggesting it will not yield significant benefits for local pubs. He advised that the reduction resembles superficial price adjustments often seen in supermarkets.
Iain Hoskins, who operates the Ma Pub Group in Liverpool, echoed similar sentiments, indicating that while the measure is appreciated, it fails to compensate for the substantial cost increases experienced over the previous year.
In addition to the business rate reduction, Mr. Burnham’s government has also proposed eliminating VAT on electricity bills and reinstating a £2 cap on single bus fares across England, signaling a committed approach to address rising living costs.
Emma Reynolds, Chief Secretary to the Treasury, has reassured the public that the policy is fully funded; however, concerns linger regarding the sustainability of revenue sources for such proposals. The Conservative opposition has urged Mr. Burnham to clarify how he intends to finance these initiatives, with Tory shadow business secretary Andrew Griffith asserting that while support for businesses is appreciated, clearer planning and transparency are essential.
The debate around these measures underscores the ongoing challenges facing the hospitality sector, as industry leaders continue to advocate for more substantial and immediate support to navigate the current economic climate.
