Andy Burnham’s plan to reshape business rates in favour of Britain’s high streets would cost approximately £880m a year, according to new analysis from global tax firm Ryan.
The proposals, which form a central plank of the Labour leadership frontrunner’s domestic agenda, would expand Small Business Rates Relief significantly across England.
Ryan’s forecasts suggest the plan would remove more than 140,000 additional small business premises from paying business rates altogether, representing a substantial shift in the tax burden.
Burnham has said he intends to fund the move by raising business rates on large warehouse developments, particularly those operated by online retailers such as Amazon.
Speaking to LBC, Burnham insisted there was still “room for movement on tax” within Labour’s 2024 manifesto while keeping to the party’s fiscal rules.
“I believe there is a case for higher business rates on warehouses and the major developments we see on the outskirts of our cities, so that we can cut business rates for pubs and lift some high street businesses out of business rates altogether,” he said.
He added that government should “prioritise and reward the businesses that bring social benefit” such as pubs, cafes, restaurants and hairdressers.
Under the proposals modelled by Ryan, the threshold for 100 per cent Small Business Rates Relief would rise from a rateable value of £12,000 to £18,000, with tapered relief’s upper threshold climbing from £15,000 to £21,000.
Tax specialists have warned the policy raises serious questions about whether larger businesses would simply be asked to shoulder a greater burden than they already carry.
Alex Probyn, practice leader for property tax at Ryan, said: “Supporting small businesses is a great policy objective. The concern is how that is funded if things have to be revenue neutral.”
Probyn added: “Larger commercial properties are already contributing more through the existing business rates surtax to fund lower liabilities for retail, hospitality and leisure. The obvious question is whether they are now going to be asked to contribute even more.”
Burnham first floated the idea during the Makerfield by-election, arguing that “online giants” should contribute more towards supporting traditional town centres.
His comments follow the government’s recent introduction of a new 2.8p business rates surtax on properties with rateable values above £500,000, designed to help fund permanent relief for retail and hospitality businesses.
The Confederation of British Industry has labelled the current system a “growth killer”, warning that 32 per cent of firms have cancelled, reduced or delayed investment because of business rates.
The CBI also notes the UK carries the highest property tax burden in the OECD relative to GDP, more than four times Germany’s level, with 76 per cent of businesses believing rates suppress investment.
CBI chief economist Louise Hellem has argued reform must “deliver real relief, not simply shuffle costs from one sector to another.”
“Business rates are no longer just a cost of doing business – they’re a major tax on ambition and one that effectively penalises investment,” she said.
The debate arrives as Britain’s high streets continue a fragile recovery, with retail sales recording a 1.2 per cent uptick in May according to the Office for National Statistics.
Analysts have cautioned that consumers remain highly price-sensitive, with many retailers still confronting rising wage, energy and operating costs throughout 2026.