Burnham pledges deeper business rates reform before budget
New PM Burnham signals broader business rates reforms, building on pub relief and hinting at online‑sales levies.
Prime Minister Andy Burnham told the BBC he will go further with business rates reform, after announcing a 20 per cent cut for pubs and nightclubs funded by higher levies on vape shops. He said the next set of measures will be unveiled alongside Chancellor John Healey at the Budget on 28 October.
Why the reform matters
Business rates are a significant overhead for brick‑and‑mortar firms, from retailers to hotels. Reducing the levy for pubs and nightclubs eases pressure on a sector still recovering from pandemic closures, but many owners argue the system penalises investment in physical premises and threatens jobs.
Background and next steps
Last year, tax minister Dan Tomlinson introduced a series of changes that sparked controversy among landlords, while in 2025 former chancellor Rachel Reeves revised Covid‑era relief formulas, prompting backlash from pubs, airports and hospitality firms. Reeves later softened the impact with a temporary 15 per cent discount for pubs.
Industry groups see Burnham’s signal as an opening for wider overhaul. "Every business that invests in physical premises, from retailers and manufacturers to offices, hotels, theatres and leisure businesses, is being held back by an outdated property tax," said Ros Morgan, chair of the Real Rates Reform Alliance. "We are more than willing to offer our expertise and work with the government to achieve genuine and long‑lasting change. The time is now."
“I wouldn’t want to promise the earth and say all can be solved because I think people can see I’m facing a difficult financial outlook and I won’t bring forward things that I can’t fully fund,” Burnham said.
The alliance has floated the idea of a modest levy on online sales to fund rate cuts, arguing it would spread the cost across digital retailers while freeing up capital for physical expansion.
All eyes will be on the upcoming Budget, where Burnham is expected to outline the precise scope of the reforms. Analysts suggest that any substantial rate reduction could boost consumer spending and help the UK economy as it grapples with a construction slowdown and lingering cost‑of‑living pressures.
Should the government deliver broader relief, landlords and investors may see improved confidence, while critics warn that higher levies on vape shops and potential online‑sales taxes could shift the burden elsewhere.
