Prime Minister Andy Burnham’s announcement of a 20% business rates cut for pubs, clubs, and live music venues has drawn a cautious welcome from business leaders, who are pressing the government for a comprehensive overhaul of the property tax system.

The measure, announced on Thursday, 23 July, aims to safeguard community venues facing soaring operational costs. However, industry groups and business organisations argue that targeted relief must be a stepping stone to wider reform for all bricks-and-mortar enterprises.

Alice Jeffries, CBI Head of Tax Policy, said: “Cuts to business rates for pubs, clubs and live music venues will provide more much needed relief for many of those businesses facing some of the sharpest cost pressures. It’s a vital first step that should help put money back into our communities and provide a welcome boost to the country’s nighttime economy.

“However, with the rates burden rising sharply for nearly all businesses with a physical presence in the UK, the next step must be to press ahead with reform of the whole broken business rates system.

“The UK's business tax burden is already at a 25-year high, while firms face the highest property tax burdens in the G7. That’s weighing on the UK's growth ambitions, with investment and profitability under strain and job creation showing signs of slowing.

“The business rates system is crying out for fundamental reform, not further piecemeal changes. It's time to move forward with proposals for a slice-based system, alongside stronger incentives for investment, to create a more competitive tax environment that supports growth, investment and job creation across the whole economy. We look forward to working with the new administration to achieve that."

Echoing the call for a wider economic strategy, Anna Leach, Chief Economist at the Institute of Directors, added: “The Chancellor is right to recognise both the vital role that businesses play in creating jobs, driving investment and delivering the growth the UK economy needs, and the pressures many firms are facing from the rising cost of doing business.

“While targeted support for hospitality and entertainment venues is also welcome, it should be part of a broader programme of business rates reform. The current system continues to place a disproportionate burden on many bricks and mortar businesses, and greater certainty is needed to encourage long-term investment in our high streets and town centres.”

Independent retailers have echoed these calls, urging the government not to overlook local shops on the high street. Hemanshu Patel, National President of the Federation of Independent Retailers, noted that high street stores face mounting cost pressures while providing essential community services, from postal provisions to local banking.

At the same time, labour market data underscores the fragile economic backdrop facing employers. Kevin Fitzgerald, UK Managing Director at Employment Hero, highlighted that structural cost increases are continuing to restrict hiring momentum across the service sector:

"Our latest platform data shows that year-on-year employment growth fell from 8.0% in June 2025 to 1.2% just three months later, showing how increases in both the National Minimum and Living Wages and Employer National Insurance Contributions have forced hospitality businesses to scale back their hiring plans. Growth has since dropped further, falling to 1.1% year-on-year in June 2026, suggesting that rising overheads have forced businesses to make difficult decisions.

“This isn't just about businesses in the sector growing, hospitality is a hugely important employer for young people and if the government is going to address youth unemployment it's clear the sector will play a key role. While today's announcement is a welcome step forward, restoring business confidence will take a concerted effort from the new government to reduce the complexity facing the sector when it comes to creating jobs and driving growth.”