UK Announces Tax Cut for Pubs, Hospitality Businesses

Britain’s new Prime Minister, Andy Burnham, has announced a 20 percent cut in business rates for pubs, clubs and live music venues as part of efforts to ease pressure on struggling hospitality businesses and tackle the cost of living crisis.

The measure, disclosed on Thursday, is the third major policy initiative since Burnham assumed office on Monday, following plans to cap most bus fares in England and remove value added tax on household electricity bills.

The government said the tax reduction would save about 32,000 hospitality businesses in England an average of £1,100 annually, although ministers have yet to provide full details on how the policy will be funded.

Burnham, who faces growing pressure to revive the economy after Labour’s 2024 election victory, described the measure as an important first step while visiting a pub in Harlow.

He said pubs were disappearing across the country and assured business owners that government support was on the way.

“We’re losing pubs. Pubs need to know that the cavalry is coming,” he told broadcasters.

Industry reaction was mixed. Ian Hoskins, owner of the Ma Pub Group in Liverpool, welcomed the announcement but said the relief was only a small step, arguing that broader reforms to business rates and stronger consumer spending were needed.

Mark Davy, chief executive of the Music Venue Trust, also described the measure as an encouraging first step.

According to the British Beer and Pub Association, pubs in the UK are closing at an average rate of one each day as rising energy, labour and operating costs continue to squeeze the sector.

The government said the £100 million annual cost of the tax cut would be funded partly by reducing tax relief for vape shops and gambling arcades.

Burnham argued that businesses associated with what he described as social harm should not receive the same level of support, saying vape shops contribute little to community life while gambling arcades can negatively affect neighbourhoods.

“Adult gaming centres on high streets can often bring real harm to communities,” Burnham said, adding that vape shops “don’t add much to community life and cause other issues too”.

The opposition Conservative Party questioned how the government intends to finance the policy.

Conservative lawmaker Matt Vickers said the announcement amounted to another unfunded spending commitment, noting that businesses had previously benefited from a 75 percent business rates discount before Labour reduced it.

Burnham, who replaced Keir Starmer earlier this week, said the policy would help protect Britain’s high streets from further decline.

In a social media post, he said he would not allow cherished local businesses to disappear and insisted pubs remain at the heart of communities.

I’m giving thousands of pubs, clubs and music venues a 20% cut in business rates.

I won’t stand by while these cherished local spaces disappear, replaced by boarded-up windows and ‘For Sale’ signs.

They’re the heart of our communities and it’s time we backed them.

— Andy Burnham (@andyburnham) July 23, 2026

“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.

Separately, more than 120 wealthy Britons, including former footballer Gary Lineker, wrote an open letter urging Burnham’s government to increase taxes on the country’s richest earners, arguing they could afford to contribute more and claiming such reforms could generate about £24 billion in additional revenue.

“We want you to tax us. We can afford it,” it said.