Andy Burnham, the man widely expected to become prime minister this month, suggested in an LBC interview on Friday that business rates on giant warehouses could be increased to fund tax cuts for pubs and high-street shops – but he insisted he would not break Labour’s 2024 manifesto pledge to avoid raising VAT, income tax or national insurance.
The newly elected Makerfield MP, who remains the only candidate to replace Sir Keir Starmer as Labour leader, said there was “some room within that manifesto for movement on tax.” He proposed a 20% cut in business rates for pubs, clubs and music venues, and a rise in the threshold for smaller independent hospitality, leisure and retail companies – the first such increase since 2017. The cost would be met by higher levies on giant warehouses run by online firms such as Amazon, and by targeting owners of empty high-street properties.
“Burnham says business rates on warehouses could fund cuts for pubs, sticking to manifesto pledges.”
The interview was Burnham’s first media appearance since announcing his bid for the top job, a race that is all but over: he is expected to take over as prime minister on 20 July. He also faces an “ask me anything” session on Reddit later on Friday, a move that drew scorn from Conservative leader Kemi Badenoch, who accused him of “running away from being asked questions” because “Reddit is easy, he can filter which ones he wants to answer, just look at the easy questions.”
Burnham defended his economic credibility, pointing to “rock solid” finances in Greater Manchester during his time as mayor and his previous experience as a Treasury minister in the last Labour government. “I stick by the manifesto and the promises that it made,” he said during the LBC interview with Andrew Marr. But he has faced past criticism for arguing that the UK had “got to get beyond this thing of being in hock to the bond markets,” a remark that raised questions about his fiscal discipline.
One of the biggest items waiting in his in-tray is defence spending. Sir Keir Starmer announced a £15bn increase this week but did not fully explain where the money would come from. Whoever Burnham chooses as chancellor will have to find at least £4.7bn in savings from other government departments.
Some on Labour’s left have called for borrowing rules to be relaxed to fund more public spending. Burnham declined to go that far, but his warehouse levy proposal signals that the next PM is willing to shift the tax burden – as long as the manifesto promises remain intact.