Britain's new prime minister Andy Burnham will cut business rates for pubs, clubs and live music venues by 20% from April, saving the typical pub about £1,100 (€1,285) next year and benefiting nearly 32,000 venues.

The £100 million (€117 million) annual package, announced Thursday, targets the licensed trade while leaving restaurants and hotels without relief. Finance minister John Healey, who started his job this week, framed it as a first move.

"This is just the start," Healey told a Bloomberg event in the City of London. "We know we've got a lot further to go."

What does the 20% cut cover?

The measure lowers the business rates multiplier for pubs, clubs and live music venues starting in April next year. Burnham, a former mayor of Greater Manchester who took power on Monday, did not extend relief to restaurants or hotels despite industry calls for a broader package including a halving of VAT on hospitality sales.

"This government will back the businesses that people want to see in their communities," Burnham said in his third cost-of-living announcement in three days.

Which operators stand to gain?

Listed pub companies including J D Wetherspoon, Marston's and Fuller, Smith & Turner will see direct reductions across their estates, alongside the UK's network of small independent freehouse and tenanted operators. The £1,100 saving per typical pub is calculated against current 2025 rateable values.

The policy excludes central London flagship hotels, regional hotel groups, restaurant chains and contract caterers.

Why are hotels and restaurants excluded?

UKHospitality CEO Allen Simpson welcomed the pub cuts but urged broader action to offset the end of COVID-era relief and the 2026 property revaluation.

"Restaurants are struggling just as much as pubs, while hotels are due to see their business rates bills increase by an average of 110%," Simpson said.

Butlin's CEO Jon Hendry Pickup added that excluding major parts of the industry "suggests those pressures are somehow less significant for some operators".

The trade body called on Healey's forthcoming budget to deliver the wider business rates reform promised in Labour's 2024 election manifesto.

How will the cut be funded?

The Treasury will fund the reduction through a review of rate relief for businesses the government considers do not make a positive contribution to local communities — a category officials have used to describe vape shops — alongside a tax crackdown on businesses selling through online marketplaces.

Burnham had previously floated raising rates on warehouses used by online retailers including Amazon. The logistics industry welcomed the reprieve, saying Burnham had listened to reason.

What is the wider economic backdrop?

A hospitality survey released in July showed 23% of respondents were operating at a loss and 5% said their business was no longer viable. Burnham took office on Monday after Labour's first 14 months in power under predecessor Keir Starmer, which investors and operators criticised for slow delivery of policy.

Ten-year UK gilt yields rose further on Thursday to their highest level since May 20, signalling fiscal pressure on Healey's plans. Healey said he and Burnham would work in lockstep to meet the government's fiscal rules, which require day-to-day spending funded from revenue and falling debt as a share of GDP.

The next milestone is Healey's forthcoming budget, where broader business rates reform, the VAT question and the 2026 revaluation timetable will return to the agenda.