Senior Labour figures Angela Rayner and Andy Burnham have renewed calls for increased tax relief for the hospitality sector, particularly pubs, amid ongoing political and economic challenges.
Their proposals, which include reductions in value added tax (VAT) and business rates, highlight tensions within the Labour Party as the leadership faces scrutiny and internal dissent.
The debate comes as the sector continues to grapple with rising operational costs and limited economic growth, intensifying calls for government intervention.
Rayner and Burnham Urge Tax Relief for Pubs
Angela Rayner, former deputy prime minister and prominent Labour figure, advocated at an event in Liverpool for further action to alleviate the pressures on businesses such as pubs, which have been hit by escalating costs.
She discussed challenges posed by business rates, VAT, increases in the minimum and living wages, and energy prices, stressing the need for a comprehensive approach to support. Andy Burnham, Mayor of Greater Manchester, echoed Rayner’s concerns, urging a VAT rate for the hospitality industry that is more comparable to those in European countries.
Burnham argued that this would boost the social and economic vibrancy of towns and cities facing stagnation. He also recommended permanent reductions to business rates for hospitality venues to sustain these businesses.
Calls for VAT Cuts and Business Rates Reform
Rayner reiterated Labour’s previous commitments to reviewing business rates and suggested the party should expedite its pledges on economic support for businesses.
She explained, 'We’ve got to start looking at the intersectionality of all these challenges and start relieving some of them.' Rayner maintained that actions promised at the previous election should be implemented swiftly in light of mounting difficulties faced by pubs.
Burnham stated, 'I would... argue for a VAT rate more consistent with what you find in Europe because of the social value that your businesses bring to places and towns that need that life injected into them.'
He affirmed his backing for a permanently lower business rates regime for hospitality companies, noting the crucial role of these businesses in local economies.
Challenges to Keir Starmer’s Authority
The calls from Rayner and Burnham have been interpreted as a challenge to Prime Minister Keir Starmer’s current policy position. Both have been mentioned as potential contenders in future Labour leadership contests.
Their interventions follow a period of internal party pressure, with segments of the Labour left urging a shift in direction. Starmer has also faced calls to modify positions on other issues such as immigration,
with over 30 Labour MPs recently signing a letter criticising the government’s approach as 'deeply unfair'. The party leadership’s handling of various internal controversies has added to existing tensions.
Economic Context and Industry Pressures
Official data from the Office for National Statistics recently reported that the UK economy managed only 0.1 per cent growth in the final quarter of 2023, reflecting ongoing stagnation.
These figures have underscored the acute challenges facing sectors such as hospitality, which contend with sluggish demand and persistently high input costs. Last month, the Treasury introduced temporary tax relief measures for pubs, but industry representatives and several political figures believe this support does not go far enough.
The hospitality sector remains a crucial employer and contributor to local high streets, heightening calls for sustained intervention.
Leadership Speculation and Union Support
Angela Rayner resigned from her Cabinet role after reports of outstanding stamp duty, but has continued to influence policy debates from the backbenches.
Support for her leadership potential surfaced recently when Maryam Eslamdoust, general secretary of the Transport and Salaried Staffs’ Association, stated Rayner would be a 'credible figure' to lead the Labour Party.
Ms Eslamdoust commented, 'I think she can show real leadership, she resonates with people. She can speak in a way that resonates with workers, with working-class communities, with women. But she’s also strong.
So when she had her unfortunate scandal, she showed leadership and stepped down; she didn’t cling on.' Rayner’s spokesperson has maintained that there is currently 'no contest and no vacancy', reiterating her commitment to party unity.
Final Summary
The mounting calls from Angela Rayner and Andy Burnham for increased hospitality industry tax relief have amplified existing divisions within the Labour Party.
Their advocacy for VAT and business rates reforms reflects wider concerns within the party’s left about both economic challenges and the party’s current direction under Keir Starmer.
With rising costs and sluggish economic growth continuing to affect the sector, the debate over support measures for pubs and other hospitality businesses is likely to intensify.
Meanwhile, ongoing party controversies and leadership speculation underline a period of significant political uncertainty. For readers seeking further political and economic analysis, the Pie app offers updated insights on the latest developments.
