London (AFP) – Britain’s new prime minister, Andy Burnham, announced a tax cut for struggling pubs, clubs, and live music venues on Thursday, his third major policy announcement in as many days designed to ease a cost-of-living crisis. The 20-percent cut to business rates — a local tax paid by firms — comes after he unveiled a planned cap on most bus fares in England and the removal of value-added tax on household electricity bills.
Burnham, who took office on Monday, is under pressure to show he can deliver the revitalized economy Labour promised when it won power in July 2024 after 14 years in opposition. The latest tax cut is expected to save some 32,000 hospitality businesses in England around £1,100 ($1,400) a year, but ministers struggled to give full details of how it would be funded. Visiting a pub in Harlow, east of London, Burnham said the cut was a “first” but “important” step. “We’re losing pubs. Pubs need to know that the cavalry is coming,” he told broadcasters.
Ian Hoskins, owner of the Ma Pub Group in the northwestern city of Liverpool, broadly welcomed the announcement but told Sky News it remained a “drop in the ocean.” He said the biggest help the government could offer would be to reform business rates entirely and ensure people had more “money in their pockets” for discretionary spends. The move was “an encouraging first step,” added Mark Davy, chief executive of the Music Venue Trust. Pubs, a quintessential cornerstone of British communities, are closing at the rate of around one a day, according to the British Beer and Pub Association. Like other hospitality businesses, they have been hit by an array of increased costs including higher energy and labor bills.
Reductions to tax relief for vape shops and gambling arcades will help to pay for the £100-million ($133-million) annual cost of the measure. “Adult gaming centres on high streets can often bring real harm to communities,” Burnham said, adding that vape shops “don’t add much to community life and cause other issues too.” Businesses that caused “social harm” would be treated differently from others, he said.
The main opposition Conservative Party said any help was welcome but called on Burnham to spell out how he planned to pay for the measure, due to come into force in April 2027. “This is the third unfunded spending commitment in three days,” Tory minister Matt Vickers told GB News, adding all leisure, hospitality, and retail businesses had previously had a 75-percent reduction in their business rates. “They (Labour) took away the 75 percent and now he’s telling them he’s giving them 20 percent back and he doesn’t know how he’s going to pay for it,” Vickers said.
Burnham succeeded unpopular premier Keir Starmer, ousted only two years after he led Labour to power in a landslide election victory. On Thursday, Burnham announced he would “pause” a plan for the possible early release from September of up to 6,000 prisoners, following anger that two men involved in the killing of a police officer in 2019 would be eligible. Chronic overcrowding of prisons is one of several challenges that the new prime minister is now tasked with solving as he tries to claw back support from the hard-right Reform UK party before the next general election, due in 2029.
Burnham said earlier on X that the business rates cut would help support the nation’s battered high streets, which have seen growing numbers of small businesses shuttered. “I won’t stand by while these cherished local spaces disappear, replaced by boarded-up windows and ‘For Sale’ signs,” he wrote. Football star turned pundit Gary Lineker was, meanwhile, among 120 UK-based millionaires who penned a letter to Burnham urging him to tax them more. The “Proud to Pay” letter organized by the Patriotic Millionaires UK campaign group claims higher taxes on top earners could raise some £24 billion. “We want you to tax us. We can afford it,” it said.
© 2024 AFP
