Burnham warned: “Fix business rates or break your manifesto”

High street bosses say the new PM must deliver root‑and‑branch business rate reform or face 130,000 more job losses

Andy Burnham hasn’t even got the keys to No.10 yet and everyone is vying for his attention. The UK’s retailers and hospitality chiefs have got their warning in early, saying he will be breaking Labour’s manifesto unless he rips up the current business rates system.

Trade bodies say the tax is crushing high street shops, pubs, cafés and restaurants, while online giants skate by untouched, and they want Burnham to act quickly as a priority. 

SCRAP IT

Allen Simpson, boss of UKHospitality, didn’t pull his punches: “If the government doesn’t scrap the business rates system and replace it, they break the manifesto.”

He warned that failing to fix the tax could make the 130,000 hospitality job losses already forecast “much, much worse”.

The new PM has pledged to stick to Labour’s 2024 manifesto, including the promise to replace business rates entirely, and “level the playing field” between high street shops and online giants. Industry leaders say tweaks won’t cut it.

THE SYSTEM IS A ‘SIN TAX’ ON COMMUNITIES

Burnham has suggested more relief for small firms and higher taxes for out‑of‑town warehouses a move retailers call “a good start”, but the system could still punish the wrong businesses, the community-based firms that employ a lot of people and have to be in a physical place. Business rates punish community‑based firms, pushing operators to shut high‑street venues and move to industrial estates instead.

TRADE BODIES WANT A NEW ‘HYBRID’ SYSTEM

A coalition including UKHospitality and the British Independent Retailers Association want a business rates system that finally reflects how modern retail works. They say the current system is unfair because it’s based on property value, not profitability, meaning struggling high‑street shops pay more than booming online retailers.

The Real Rates Reform Alliance claims the Treasury could cut bills for bricks‑and‑mortar firms by 37% by adding a tiny 2% tax on online sales.

Because this has been such a problem for hospitality and retail businesses for so long with devastating impact, getting business rates right could make an enormous difference to the country’s finances, business growth and how firms see the Government.

PREVIOUS FIXES WERE ‘STICKING PLASTERS’

Retailers say Labour’s past tweaks have caused chaos. The Chancellor’s changes last year sent business rate bills soaring for thousands of hospitality firms, triggering a backlash so fierce the Chancellor had to offer a £300m relief package to pubs.

PRESSURE MOUNTS FOR A VAT CUT TO 10%

On top of the business rates storm, the new PM is also facing calls to slash VAT for pubs, bars, cafés and restaurants from 20% to 10%.

Some hospitality leaders backed his leadership bid because he previously hinted at support for VAT cuts but his team is still refusing to confirm anything is on or off the table.

BOTTOM LINE

Andy Burnham is walking into No.10 with warning from all sides ringing in his ears:

• business rates are broken

• high streets are suffering

• hospitality is bleeding jobs

• online giants are winning

• past fixes have failed

• VAT pressure is rising

If he doesn’t deliver full business rates reform, industry leaders say he’ll break Labour’s manifesto before he’s even started. For Britain’s small and micro businesses, the stakes couldn’t be higher.