In a bold move during his campaign for the Makerfield byelection, Greater Manchester mayor Andy Burnham has unveiled a plan to significantly reduce business rates for pubs, cafes, and other small businesses. This initiative comes as a sharp critique of current Labour leadership policies under Keir Starmer, highlighting Burnham’s commitment to supporting local enterprises.
A Comprehensive Business Rate Reduction Plan
Burnham’s proposal suggests a 20% reduction in business rates for pubs, clubs, and music venues, while smaller, family-run businesses could be exempted from the levy entirely. This marks Burnham’s first major policy initiative as he seeks to galvanise support ahead of the byelection on 18 June, triggered by the resignation of sitting MP Josh Simons.
In a statement released on Friday, Burnham expressed his concerns regarding the government’s approach to small businesses, stating, “Labour have got it wrong on small businesses.” His remarks signal a willingness to challenge the status quo within the party, as he emphasised the importance of local businesses to community life.
Under Burnham’s plan, independent hospitality, leisure, and retail firms would benefit from a raised threshold for business rates for the first time since 2017. This adjustment aims to prevent a “payments cliff edge” that could otherwise burden small enterprises.
Financing the Cuts
To fund these proposed cuts, Burnham has suggested implementing higher levies on large warehouses operated by online retailers, such as Amazon, alongside targeting owners of vacant high street properties. He made it clear that he is open to acknowledging where the party has faltered, stating, “I am willing to be honest about where we have fallen short and say that my party has got this wrong in government.”
Burnham’s strategy contrasts sharply with the Treasury’s recent announcement of a 15% business rate reduction for pubs in England, set to commence on 1 April, followed by a freeze on bills for two years. This earlier measure came after significant backlash from the hospitality sector, which warned of job losses and potential closures due to unfavourable changes in tax policy.
Response from the Hospitality Sector
The response from industry representatives, such as UKHospitality, has been cautious. While they acknowledged Burnham’s recognition of the flaws in the current system, they argued that any effective policy should also consider measures like reduced VAT for hospitality businesses. The trade body pointed out that most members still anticipated higher business rates and that, combined with an increased minimum wage, this could lead to significant job cuts across the sector.
Aiming for a Return to Westminster
As Burnham campaigns for a return to Westminster, he has made it clear that his ambition extends beyond the Makerfield seat. During a recent BBC Question Time special, he confirmed his intention to challenge Keir Starmer for the Labour leadership if elected. He noted potential challengers within the party, including former health secretary Wes Streeting, and expressed a desire to join the leadership contest.
Why it Matters
Burnham’s proposals resonate deeply in a climate where small businesses are increasingly under threat from rising costs and changing economic landscapes. By positioning himself as a champion for local enterprises, he not only differentiates himself from the current Labour leadership but also seeks to reinvigorate grassroots support in the party. This initiative reflects a broader recognition of the vital role that small businesses play in the fabric of British communities, making it imperative for political leaders to address their needs effectively.
