Rates change welcomed, but doesn't go as far as many in hospitality wantedpublished at 07:48 BST

07:48 BST

Simon Jack
Business editor

Andy Burnham has made it very clear that he sees the high street as a key barometer of how people are feeling in the places where they live.

This third policy in as many days is meant to sow some good vibes and create a bit of "breathing space" for pubs, clubs and music venues .

UK Hospitality and the Nighttime industries Association both welcomed it but it doesn't go as far as many in hospitality wanted - a big cut in VAT from 20% to somewhere nearer the European average of 9% - something Andy Burnham himself has pointed out in the past.

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How government say the policy will be funded is eye-catchingpublished at 07:36 BST

07:36 BST

Emma Simpson
Business correspondent

The most eye-catching thing is the idea this support is going to be paid for by reviewing tax reliefs currently given to businesses “that don’t make a positive contribution to local communities” specifically highlighting vape shops.

“I’m not sure getting vape shops to pay for it will fill the gap” one seasoned rating expert told me.

As ever with business rates, the devil is in the detail and we may have to wait until the Budget before we know more, when other wider changes are likely to be announced.

Image source, EPA

Image source, PA Media

"Twenty percent is not an insignificant figure," says Iain Hoskins, owner of Ma Pub Group which operates five hospitality venues across Liverpool.

Hoskins tells the Today programme that since his business was revalued, the rates charge on his venues has increased by 100-150%, and he now pays between £200,000-£300,000 a year.

But Hoskins stresses that "the devil is in the detail", and he wants to hear more about what types of venues will qualify.

"I got very excited last year when we were told about the 15% [rates cut]," he says.

"It worked out that only one out of the five venues that we had qualified for that support because they didn't have the word pub in the name," he says.

His venues are cafe bars, meaning they serve coffee in the day and alcoholic drinks at night, so he says: "I hope there's a little bit more discretion when it comes to categorising the hospitality businesses that we operate".

Image source, PA Media

Under Keir Starmer, there was significant back and forth over business rates, which was kickstarted by changes announced in the Autumn Budget - here's a quick reminder:

In the Autumn Budget of November 2025, then-Chancellor Rachel Reeves scaled back business rate discounts that had been in force since the pandemic from 75% to 40% - and announced that there would be no discount at all from April.

There were also changes announced to the way business rates would be calculated.

This led to a backlash from Labour MPs, who called on Keir Starmer to rethink the planned changes to protect pubs and other hospitality businesses.

The pub industry warned of widespread closures when the Covid-era business rate relief came to an end in April.

Then in January 2026, the government announced pubs and music venues in England would be given a 15% discount on their business rates bills from April and would not see increases for two years.

Allen Simpson, chief executive of trade body UK Hospitality, says today's announcement is "a good start" and shows "a direction of travel".

Simpson tells BBC Breakfast that after increases in pubs' bills, this policy "goes even further" in terms of help than the announcement in January of a 15% discount on business rates bills.

But he adds there needs to be "bigger solutions," as this cut does not include everyone in hospitality - such as hotels.

Simpson adds the sector is also taxed at "a level totally disproportionate" to the rest of the economy and the rest of Europe.

"Hopefully at the Budget we will see the change we need on the rest of the sector," he says.

With today's policy announcement, Burnham shifts to look at businessespublished at 07:04 BST

07:04 BST

Henry Zeffman
Chief political correspondent

Image source, Getty Images

It’s the third consecutive day where Andy Burnham has announced a new policy at 6am.

That common approach to public relations aside, there is a difference in today’s announcement from the first two, which were on household electricity bills and bus fares.

Those were about giving people what the new prime minister calls “breathing space” against cost of living pressures.

This announcement is different, focusing instead on businesses. The “breathing space” phrase is absent from today’s announcement. Instead, the rationale given by Burnham is that government must “back the businesses that people want to see in their communities” rather than standing by while “cherished venues have disappeared from our local high streets.”

Arguably another difference is that the explanation of how this tax cut will be funded is a bit vaguer than the funding of the electricity tax cut and the fare cap.

Given this policy – again unlike the previous two – does not take effect until the start of the next tax year in April, many of the details are likely to come alongside a slew of other policy on tax and spend in the autumn Budget, the first presented by the new chancellor John Healey

Archie Mitchell
Business reporter

The Night Time Industries Association (NTIA) says the government’s announcement “demonstrates a broader recognition of the vital economic, cultural and social contribution made by the night-time economy”.

Chief executive Michael Kill says the tax break could provide “meaningful relief to businesses facing sustained cost pressures”.

He says the announcement, the third policy shift since Andy Burnham took over as prime minister on Monday, is part of a package which is beginning to “shift confidence across the sector” and “create renewed optimism” among hospitality bosses.

But he adds that the sector is awaiting details to be set out at the Budget, while questions remain about the exclusion of the largest live music venues.

Image source, Reuters

Today's policy announcement is the third in as many days from new PM Andy Burnham.

At 06:00 on Burnham's first full day as PM, the government said they would be cutting VAT from household electricity bills come October.

That would be funded by reallocating funds through scrapping the digital ID programme, the government said.

Then, at the same time on Wednesday, another policy dropped - a £2 cap on bus journeys across England, but outside of London, to come into effect in January.

The majority of the funding for that will be drawn from Department for Energy Security and Net Zero funds via plans to switch grants for international climate projects in other countries into loans, officials said.

Image source, EPA/Shutterstock

“Pubs, clubs and live music venues are at the heart of communities across the UK," says Chancellor John Healey of the business rates cut announcement.

He says: "They bring people together, support local jobs and help keep high streets and town centres busy — which is why we will back them all the way."

“We are determined to bring hope back, give businesses the support they need and generate growth in every postcode," he adds.

Henry Zeffman
Chief political correspondent

More details now on the government's announcement to slash business rates for pubs, clubs and live music venues.

The government says it is expected to save a typical pub an estimated £1,100 in tax next year.

Prime Minister Andy Burnham says the policy's a sign that his government will "back the businesses that people want to see in their communities" rather than standing by while "cherished venues have disappeared from our local high streets".

Downing Street says the tax cut, which will cost around £100 million a year, will be funded by a review of tax reliefs currently given to businesses which "do not make a positive contribution to local communities, such as vape shops".

Image source, EPA

It adds the government will also "crack down" on businesses selling through online marketplaces which "do not comply with their tax obligations".

The rates cut will not apply to the very largest live music venues, with more details of which businesses are eligible to be announced at John Healey's first Budget in the autumn.

Business rates for pubs, clubs and live music venues will be cut by 20% across England from April next year, Downing Street has announced.

It is the third policy announced in as many days since Andy Burnham became PM.

This is a breaking story and we will bring you more shortly

Image source, EPA

Image source, Reuters

During Burnham's by-election campaign in Makerfield, his team released a policy document promising a cut in business rates for pubs and music venues by 20%.

That would be paid for, they said, with higher taxes on out-of-town warehouses used by online retailers like Amazon.

The prime minister has also previously said he wants to raise the threshold at which business rates kick in, which would take lots of small high street shops out of paying altogether.

“Our high streets matter to me because they matter to the people who live here. I want to make sure that these family-owned businesses, as the heart and soul of this country, are protected and given the chance to thrive," he said at the time, adding that his party had so far "got this wrong".

After winning the Makerfield by-election and in his first speech as Labour leader, Burnham pitted himself as a "pro-business" party leader - just as "I was a pro-business mayor of Greater Manchester" he said.

Business rates are charged on most non-domestic properties such as shops, offices, pubs and holiday rental homes.

Scotland and Northern Ireland use similar methods, but here's how it's worked out in England and Wales.

The sum is property dependent and calculated using what's called a "rateable value," or in other words an estimate of the property's open market rental value by the Valuation Office.

The local council takes that value and multiples it with a figure called the "multipler" to produce the final rate.

What the multipler is also depends on the estimated value of the property - and if the rateable value is below £500,000 then there are different values according to the type of business too.

Wales and the City of London have slightly different rules to the rest of England for calculating multipliers - but they too consider the type of property and its rateable value in order to produce the multiplier.

Image source, PA Media

The government is expected to make an announcement on support for the hospitality industry shortly, likely in the form of an adjustment to business rates for pubs and music venues.

It will be the third consecutive day of cost-saving measures announced by Andy Burnham's government, and follows yesterday's announcement that most bus fares in England will be capped at £2 from January.

Tuesday saw the government cut VAT from household electricity bills from 1 October.

Stay with us as we bring you more details.