Andy Burnham has a new plan for pubs – here’s the proof it will make barely any difference | Personal Finance | Finance
On paper, Burnham’s latest announcement looks like a nice new victory for British boozers. A 20% slash in business rates for nearly 32,000 pubs, clubs and live music venues across England from next April? Sounds great. Funded by a crackdown on blights like vape shops? Even better.
Looking beyond the headline, it’s not all that. Westminster boasts the cut will save a “typical” pub £1,100 per year – or around £91 per month. Sadly, this doesn’t really put a dent in the damage caused by the massive tax increases slapped on them after two Labour budgets.
Labour hiked Employers’ National Insurance rates to 15% and dropped the payment threshold down from £9,100 to £5,000 at the same time in April 2025, hammering lower-wage sectors particularly hard. Pubs, clubs and live music venues saw their costs increase by thousands of pounds overnight. When you then factor in relentlessly high energy bills, inflation and two consecutive years of minimum wage increases, handing the hospitality industry one grand is barely even breathing space.
UKHospitality estimated that combined employment measures (raising Employer NICS, dropping the pay threshold, and raising minimum wage) added more than £2,500 per year to the cost of employing one single full-time staff member. Based on that calculation, a small pub employing an average of eight to 10 people would have seen its costs rise by around £37,500 per year. But cheers for the £1,100 per year discount, Andy!
Publicans don’t need a headline that looks good on paper, they need a meaningful tax reform to keep the industry afloat. The British Beer and Pub Association (BBPA) said 161 pubs closed in the first three months of this year across England, Scotland and Wales due to soaring costs. This equated to around 2,400 job losses. Those managing to survive in the broader hospitality industry saw bills increase by at least £3.2billion last year in just wages alone.
Punters haven’t escaped, either. Since 2022, the average price of pint has rocketed by 36%, with landlords pinning the hike down to rising costs of “everything that goes in it”. Across the UK, you’re now looking at around £5.34 on average per pint, rising to around £6.55 in London. Some venues in the capital have even pushed prices up to £8 to £10 a pop. Many have warned it’ll only get worse.
Don’t get me wrong, it’s encouraging to see Burnham announce successive cost-easing measures this week. But, while extending a £2 bus fare cap will provide genuine relief for daily commuters, others amount to piecemeal relief that barely impacts budgets. One headline-grabbing change – the removal of VAT from electricity bills in October – will save households just £3.75 per month. You could probably find that down the back of the sofa.
If Westminster wants to preserve the Great British Pub, it needs to stop tinkering around the edges and announce a real tax overhaul for these businesses. Go even further, and make a meaningful difference. Reversing Rachel Reeves’s Employer National Insurance threshold cut back to £9,100 would be a good place to start, delivering immediate, tangible relief worth much more than that £91 per month saving.
