From Manchester to No.10: What Burnham has promised hospitality

Burnham will officially replace Sir Keir Starmer as Prime Minister today (Monday 20 July), following the outgoing PM’s resignation last month.

He is expected to make a speech outside No.10 later today setting out his priorities for Government.

The hospitality sector in particular will be watching closely to see whether Burnham delivers on a series of commitments aimed at easing the cost burden facing hospitality businesses before taking office.

At the centre of his offer to the industry was business rates reform.

Burnham pledged to cut business rates for pubs, clubs and music venues by 20%, while also increasing the threshold that small businesses qualify for 100% Small Business Rates Relief from a rateable value of £12,000 to £18,000.

He also vowed to extend the taper relief threshold from £15,000 to £21,000, a move that could lift more than 140,000 additional small premises out of paying business rates and reduce liabilities by around £880m a year, according to analysis from tax firm Ryan.

Cautious optimism

Burnham argued the changes could be funded by asking large online warehouse operators to contribute more, adding high street businesses pay a disproportionate share of their turnover in business rates.

The former Mayor of Greater Manchester has also repeatedly committed to cutting rates for pubs and taking some high street businesses out of the system altogether.

Alongside rates reform, Burnham pledged to review the increase in employers’ National Insurance Contributions, acknowledging the pressure higher payroll costs have placed on labour-intensive sectors such as hospitality.

While he has backed calls for a VAT reduction for hospitality from 20% to 10%, he stopped short of making it a firm commitment, instead placing business rates reform at the centre of his offer to the sector.

Burnham, who was elected as MP for Makerfield in June, further promised to support the night-time economy through licensing and planning reforms, including targeted measures to reduce red tape and make it easier for venues to offer outdoor hospitality.

More recently, he has also discussed plans to scrap the Government’s policy on digital IDs in a bid to focus on “helping with the cost-of-living crisis”.

Trade bodies have welcomed Burnham’s plans, but industry leaders will now be looking for a clear timetable on when those commitments will be delivered.

Meanwhile, operators have so far reacted with cautious optimism to Burnham’s appointment, welcoming his rhetoric but questioning how quickly his promises could become reality.

Speaking to The Morning Advertiser (The MA) editor Ed Bedington last week, Bigger Boat Hospitality managing director Neil Burke described Burnham as “hospitality focused”.

Quick fix

He said a cut to VAT could provide a much-needed “quick fix” for struggling operators, giving them some breathing room, but stressed it would address only one of the many challenges facing the sector.

Burke also questioned where the money would come from to fund Burnham’s pledges, despite the Prime Minister’s suggestion larger retail businesses could be asked to contribute more.

“If he can [cut VAT], brilliant, but I question if he can,” Burke said.

“It’s all very good talking about what you can do when you are not in the job but when you see the numbers and that money is being spent elsewhere, how can he make that cut?

“He doesn’t know yet where that 10% he may cut the VAT from is being spent, is it coming from healthcare or other areas, how does he know? Let’s see, it’s a lot of talk and the Government is not in a position to just cut that money and not find it from somewhere else.”

Though he said Burnham appeared to be a “man of his word”, adding: “I think his intentions are right and he wants to do it.”

Moreover, Bigger Boat Hospitality co-founder and executive chef Ben Chaplin told The MA Burnham had built a strong relationship with the sector in Manchester, but that the real test would be whether he could deliver the same support nationwide.