Burnham’s Business Rates Proposals Raise Questions Over Growth and Competitiveness

With Andy Burnham now emerging as the overwhelming favourite to succeed Sir Keir Starmer, debate around his proposals on business rates and support for high streets, hospitality and smaller businesses is likely to intensify.

Whilst those objectives are likely to attract broad support, questions remain around how such measures would be funded and the implications for investment, logistics, larger occupiers and the wider economy.

Alex Probyn, Practice Leader for Europe and Asia-Pacific Property Tax at global tax firm Ryan, commented:

“Andy Burnham’s support for pubs, music venues and smaller businesses will resonate with many people and those sectors have faced enormous pressures in recent years. Few would argue with the objective of supporting the high street and local communities.

“The concern is how those ambitions are funded.

“What his policy appears to be is not a reduction in the overall burden of business rates, but a redistribution of it. The danger is that larger occupiers, logistics infrastructure and empty property become the funding mechanism.

“That may be politically attractive, but it risks confusing symptoms with causes. Higher taxes do not create occupier demand, nor do they encourage investment.

“If you want more growth, more jobs and more regeneration, taxing investment to subsidise consumption is a questionable strategy.

“Business rates reform should be about making the economy more competitive, not simply deciding who pays more.”