New UK PM Andy Burnham announces tax cut for struggling pubs

Ministers struggled to say how it would be funded

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Published Jul 23, 2026  •  2 minute read

In his first days in office, UK Prime Minister Andy Burnham has removed VAT from electricity bills, capped bus fares at £2 and announced a 20 percent cut in business rates for pubs and clubs. Photo by Toby Melville /POOL/AFP

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LONDON — The UK government Thursday announced a tax cut for struggling pubs, clubs and live music venues as new Prime Minister Andy Burnham aims to ease the cost of living crisis.

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The 20 percent cut to business rates — a local tax paid by firms — is the third policy announcement since Burnham became prime minister on Monday, including a planned cap on most bus fares in England and the removal of value added tax on household electricity bills.

The latest tax cut is expected to save some 32,000 hospitality businesses around £1,100 ($1,400) a year, but ministers struggled to say how it would be funded.

It is estimated the cut will cost government finances around £100 million a year.

Burnham is under pressure to show he can deliver the revitalised economy Labour promised when it won power in July 2024 after 14 years in opposition.

Ian Hoskins, owner of the Ma Pub Group in northwestern Liverpool, broadly welcomed the announcement but told Sky News it remained a “drop in the ocean”.

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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 “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 labour bills.

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 crime and policing spokesperson Matt Vickers told GB News, adding that all leisure, hospitality, and retail businesses previously got a 75 percent reduction in their business rates.

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“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,” he said.

– ‘Proud to pay’ –

Burnham succeeded the unpopular Keir Starmer, ousted only two years after he led Labour to power in a landslide election victory.

The new prime minister said on X 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.

“They’re the heart of our communities and it’s time we backed them,” he added.

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 organised 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.

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