Key facts
- Businesses have urged Andy Burnham to boost the West End by cutting tax and boosting policing.
- Andy Burnham became prime minister on Monday.
- Burnham has announced a cap on bus fares.
- VAT on domestic energy bills has been removed.
- A 20% cut in business rates for most pubs, clubs, and live music venues has been announced.
- The VAT cut on electricity bills is estimated to save a typical household about £45 a year.
Businesses have called on Prime Minister Andy Burnham to implement tax cuts and increase policing in London's West End shopping district. Burnham, who assumed office on Monday, has already introduced several policy changes aimed at assisting households and businesses.
These changes include a cap on bus fares, the removal of 5% VAT on domestic energy bills, and a 20% reduction in business rates for most pubs, clubs, and live music venues. The VAT cut on electricity bills is expected to save a typical household approximately £45 annually, equating to just over 86p per week. The average annual electricity bill in London for a typical household is around £875. This reduction, effective from October 1 and funded until March 2027, applies only to electricity usage.
While welcomed, the VAT cut is not anticipated to significantly alleviate the struggles of Londoners facing high energy costs, as it does not address wholesale electricity prices, green levies, or supplier markups. In 2024, an estimated 13.2% of London's population, or 471,000 individuals, were classified as living in fuel poverty. Martin Lewis described the VAT cut as a "good totemic step" but noted that people would "in practice... won't feel much benefit." Citizens Advice chief executive Dame Clare Moriarty stated that while the cut offers "welcome breathing space," further action is needed to address the root causes of unaffordable bills.
Regarding the hospitality sector, the London night-time economy contributes over £139 billion annually and supports more than a million workers. The 20% business rates cut for pubs, clubs, and live music venues was welcomed by Karim Fatehi, CEO of the London Chamber of Commerce and Industry, as a "welcome step for many of London's hospitality firms," with an average saving of about £1,100 per year for a pub or venue. However, Fatehi also highlighted ongoing pressures such as high employment costs and inflation. Chef and publican Tom Kerridge, who has campaigned for a 10% hospitality VAT cut, commented that the £1,000 annual saving "doesn't really make a difference." Emma McClarkin, CEO of the British Beer and Pub Association, added that pubs have been "ground down" by disproportionately high business rates.