Key facts
- Andy Burnham is accused of a "piecemeal" approach to business rates reform.
- A government review will examine property valuations for pubs and hotels.
- Industry groups argue the review should encompass all sectors, not just pubs and hotels.
- Retailers and restaurants are excluded from the current review.
- Labour's manifesto pledged to replace the business rates system entirely.
Andy Burnham has been criticized for a "piecemeal" approach to business rates reform, falling short of Labour's manifesto pledge to replace the tax system. The government has initiated a review focused on property valuations for pubs and hotels, aiming to make bills "fairer" for these businesses, led by "business rates expert" Jerry Schurder.
However, industry bodies argue this review is too narrowly focused. The British Chambers of Commerce (BCC) stated that the review should be broader, covering all sectors, and that a full reform of business rates is urgently needed. Retailers and restaurants are excluded from this specific review, despite warnings of high bills and declining profits. A report indicated that the UK's top 100 restaurant groups saw profits fall by 44% in the past year, citing rising employment costs and business rates.
The Real Rates Reform Alliance expressed disappointment with the narrow scope, advocating for a complete overhaul rather than sector-by-sector adjustments. The Alliance has proposed a 37% reduction in business rates for physical stores, funded by a 2% levy on online sales. Burnham himself has previously supported taxing warehouses to subsidize business rate cuts for high street firms, a proposal met with opposition from some retailers.
Labour's 2024 election manifesto committed to replacing the business rates system with a fairer alternative. Financial Secretary to the Treasury James Murray affirmed the government's commitment to fairness, highlighting recent tax cuts for pubs and the current rethink of valuations.