Business rates will be cut by 20% for pubs, clubs and live music venues across England from April next year, Downing Street has announced.
The discount will apply to nearly 32,000 hospitality businesses and is expected to save a typical pub some £1,100 annually, but will not be available to the very largest live music venues.
The overhaul of business rates will be funded through a review of reliefs for businesses that “do not make a positive contribution to local communities”, such as vape shops, and a crackdown on online marketplaces that do not comply with tax obligations, No 10 said.
Prime Minister Andy Burnham had previously pledged to raise taxes on out-of-town warehouses for online giants like Amazon to help pay for cuts to rates for hospitality firms.
“This government will back the businesses that people want to see in their communities,” Burnham said.
“I said I would protect pubs and local high streets – the beating heart of our communities – and that’s what we will do. What we’re announcing today is just the start as we work to bring back hope across the country.”
Chancellor of the Exchequer John Healey described pubs, clubs and live music venues as “the heart of communities across the UK”.
Healey, who took over as chancellor from Rachel Reeves earlier this week, promised to lift “pessimism” about the UK economy and curb costs for business as he spoke at a reception for business in London on Thursday.
“Businesses of all sizes in all sectors are so critical to the good growth we seek to secure in this country, for delivering the investment, the innovation, the re-industrialisation that our economy needs,” Healey said.
He promised to back British businesses “in all parts of the economy” and pointed to the struggles they face in the cost-of-living crisis as well.
Healey said: “Tax, energy, supply-chain costs, labour – I know that businesses large and small have felt really squeezed.”
Burnham pledged to lead a “cost-of-living government” during his first Cabinet meeting on Tuesday.
His policies so far have included cutting VAT on energy bills, capping bus fares at £2, and now the reduction of business rates on pubs, clubs and music venues.
On Thursday, Conservative leader Kemi Badenoch challenged the PM on “who will pay” for the changes.
In a speech in London, Badenoch said: “Andy Burnham needs to tell us who will pay for those taxes and if he won’t, we should assume it will be the same people Labour always turn to when the sums don’t add up.
“Working people, small businesses, the people who get up early, take risks, hire staff and try to build something.”
Badenoch also asked Burnham to “rule out tax rises to pay for his spending spree” and accused him of not having a plan.
Burnham’s latest policies come as 120 UK-based millionaires, including broadcaster and ex-footballer Gary Lineker, called on him to impose higher taxes on their wealth in an open letter on Thursday morning.
The “Proud to Pay” letter to the PM, organised by the Patriotic Millionaires UK campaign group, said money raised from higher taxes on wealth could be used to reduce inequality, support public infrastructure, and back small businesses.
It reads: “We want you to tax us. We can afford it.
“We’re not talking about higher taxes on those who get up and go to work for their income every day, but on the very richest whose income is derived from the wealth they hold.”
Lineker said of the letter: “Paying your fair share is a basic British value, but so many ordinary people are already paying more than they can afford.
“Our richest people can do more and most want to. Our fantastic country deserves all of us to get behind it.”
Other signatories include crime writer Val McDermid, musician and songwriter Brian Eno, former chairman of Greggs Ian Gregg, economist Gary Stevenson and investor Julia Davies.
According to the Patriotic Millionaires, a 2% tax on wealth over £10 million could raise £24 billion a year for the UK, while reforms to capital gains tax could raise a further £12 billion.
Polling from the campaign group also showed that 80% of UK millionaires support a 2% tax on wealth over £10 million.
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Later on Thursday, Burnham will meet the leaders of Scotland and Wales for the first time since becoming Prime Minister when he travels to Glasgow.
The new PM backs further devolution, but both First Minister of Scotland John Swinney and the First Minister of Wales Rhun ap Iorwerth, want independence for their countries.
The former Manchester mayor said he will not be considering any referendums and is instead focused on delivering growth.