The potential upcoming Labour Party leader, Andy Burnham, has suggested that warehouses and major out-of-town developments should pay higher business rates in order to fund tax cuts for pubs and high-street businesses.
On LBC’s Tonight, the MP for Makerfield and former Greater Manchester mayor said that this motion could help fund lower business rates for pubs, including a proposed 20% cut, allowing some high-street businesses to be removed from business rates altogether.
Burnham also said that he thinks it is important to prioritise and reward businesses that bring social benefit and promote community - such as bars, restaurants, cafes and hairdressers – and give high streets more attention.
This proposal is yet to be accompanied by a policy document setting out how the proposal would work or which types of warehouse or logistics facility would be affected. Burnham also hasn’t mentioned whether the change would involve a further increase beyond existing business rates reforms already in place.
In April 2026, the government introduced new lower business rates multipliers for qualifying retail, hospitality and leisure properties in England with rateable values below £500,000. Those reforms are partially funded through a higher multiplier for properties with rateable values of £500,000 and above. The government has said that this group represents less than 1% of all properties, but includes many large distribution warehouses, including those used by online retail businesses. According to HM Treasury, large distribution warehouses such as those used by online giants are expected to pay around £100m more in business rates in 2026/27, with that revenue used to support lower bills for in-person retail.
Burnham’s proposal is likely to prompt concern among logistics operators, retailers, developers and occupiers of large-scale warehouse space, especially as the sector is already dealing with higher labour, energy, property and compliance costs.