Andy Burnham’s proposal to cut business rates for pubs, clubs and music venues by 20 per cent through a new levy on large warehouses has drawn criticism from retail executives and property tax specialists, who argue the policy risks shifting costs onto traditional retailers while failing to generate sufficient revenue.
The proposal, unveiled as part of Burnham’s wider economic agenda, aims to ease pressure on Britain’s struggling high streets by increasing the tax burden on what he has described as “online tech companies and their warehouses”.
Speaking to LBC, the Greater Manchester mayor said Britain’s high streets required greater political attention, positioning the policy as a means of rebalancing competition between physical retailers and online businesses.
However, new analysis by property tax consultancy Ryan suggests the economics of the proposal may prove difficult.
According to the firm’s assessment, only around 1,900 large warehouses in England currently fall within the highest business rates category and would be the most likely targets for higher taxation.
Of those properties, just 129 are operated exclusively by online retailers, meaning the overwhelming majority belong to businesses that also maintain significant physical store networks.
The analysis concludes that even doubling business rates on the largest warehouses would fail to generate enough revenue to finance a 20 per cent reduction in business rates for pubs, clubs and live music venues.
That raises the prospect that any future government seeking to implement the policy could instead extend higher charges across a much broader range of commercial properties.
Existing legislation already allows additional business rates surcharges on approximately 17,000 of Britain’s highest-value commercial properties, including distribution centres, supermarkets, department stores and major retail estates.
Alex Probyn, practice leader for property tax at Ryan, said maximising the existing surcharge could generate around £1.32 billion annually without introducing an entirely new tax.
Retailers argue that approach would have significant unintended consequences.
One FTSE 100 retail chief executive warned that supermarkets, which typically operate on relatively thin profit margins, would struggle to absorb additional business rates without passing costs on to consumers through higher prices.
The intervention comes at a time when retailers are already facing increased employment costs following higher National Insurance contributions and National Living Wage increases, alongside continued inflationary pressure across supply chains.
Helen Dickinson, chief executive of the British Retail Consortium, said Burnham was right to prioritise high street regeneration but questioned how the proposed funding mechanism would operate in practice.
Property specialists also argue the proposal misunderstands the increasingly integrated nature of modern retail.
Robert Taylor, head of research at real estate adviser DTRE, said warehouses now form the logistical backbone of both online commerce and traditional high street retailers, supporting everything from home delivery to in-store replenishment.
Britain’s largest logistics facilities are operated not only by Amazon but also by established retailers including Next, Tesco, Lidl, John Lewis, Sports Direct and Marks & Spencer, illustrating how warehouse infrastructure has become central to omnichannel retail strategies.
For policymakers, the debate highlights the growing challenge of reforming Britain’s business rates system without creating new distortions across the wider economy.
While reducing costs for hospitality businesses remains politically attractive, critics argue that shifting the tax burden onto another segment of the commercial property market risks redistributing pressures rather than addressing the structural weaknesses of the business rates regime itself.
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