Andy Burnham has launched a major policy intervention of the Makerfield by-election campaign with a pledge to cut business rates for pubs and ease the tax burden on small businesses, marking a clear break with Keir Starmer’s government.
The Greater Manchester mayor said Labour had “got it wrong” on small businesses as he unveiled plans to cut business rates for pubs, clubs and music venues by a further 20 per cent and remove thousands of smaller firms from the rates system altogether.
“I am willing to be honest about where we have fallen short and say that my party has got this wrong in government,” Burnham said. “They have undervalued the contribution these businesses make to our livelihoods and our communities.”
The proposals would go beyond support already announced by Rachel Reeves and are likely to be welcomed by hospitality firms that have repeatedly warned Labour’s tax increases are squeezing margins, investment and hiring.
Burnham has also renewed criticism of the Chancellor’s increase to employers’ national insurance contributions, suggesting he would be open to revisiting the policy.
Speaking to the BBC, he said: “I have said that I thought the weight of the burden on employers’ national insurance wasn’t the right decision. There is more that needs to be done to listen to the voice of small business.”
Challenging Reeves’ tax strategy
Hospitality leaders have repeatedly argued that higher national insurance contributions, increases to the minimum wage and business rates reforms have created a difficult environment for pubs, restaurants and retailers.
Recent analysis by industry groups suggests many venues continue to face rising costs despite government support packages, with closures across the sector remaining stubbornly high.
Burnham’s proposal would raise the threshold at which smaller firms start paying business rates, a level that has remained frozen since 2017 despite years of inflation and property revaluations.
The package would be funded through higher charges on large online distribution warehouses and levies on long-term vacant high street properties.
The move also taps into a broader argument gaining traction among business leaders. CBI chief executive Rain Newton-Smith is expected to warn this week that the cost of doing business is approaching a “tipping point”, arguing that tax rises and employment costs are weighing on growth and investment.
Having confirmed he would enter a Labour leadership race if one materialises, the former cabinet minister is beginning to outline what a Burnham premiership might look like: more support for high streets, a softer approach to business taxation and a willingness to publicly challenge decisions made by Starmer and Reeves.
