Pubs, bars and hotels report ‘Burnham bounce’ in optimism but call for further tax relief

Hospitality and brewing businesses have reported a sharp rise in optimism since Andy Burnham announced a 20% cut to business rates for pubs, clubs and live music venues, according to a survey by four trade bodies. The share of businesses that believe the government will benefit the sector has more than doubled to 37%, up from 18% before the policy was announced, an increase the bodies described as a "Burnham bounce".

The survey, compiled by the British Beer & Pub Association, UK Hospitality, the British Institute of Innkeeping and Hospitality Ulster, was shared with the Guardian. It covers a sector worth about £100bn to the UK economy. The prime minister announced the rates discount last month, saying pubs "need to know the cavalry is coming".

But the trade bodies warned that the optimism could evaporate without wider tax relief. Three-quarters of respondents pointed to tax as the biggest barrier for businesses, with political instability cited by 37% as the second biggest. In a joint statement, the groups said the rates cut was "a great first step" but called for "wider support and conditions to allow the entire hospitality sector to grow and create jobs".

“The new prime minister’s action to back hospitality has clearly driven a boost in the sector’s optimism, yet significant challenges remain. The support for pubs and live music venues on business rates was a great first step and now we need to see wider support and conditions to allow the entire hospitality sector to grow and create jobs.”

: Joint statement from the British Beer & Pub Association, UK Hospitality, the British Institute of Innkeeping and Hospitality Ulster

The rates cut applies to nearly 32,000 hospitality businesses and is expected to save a typical pub about £1,100 a year, according to government figures cited by ITV News. It does not include hotels, restaurants and holiday parks. Patrick Langmaid, chairman of Cornwall's Holiday Parks and Residential Parks Association, said those businesses had been "overlooked" and felt "thrown under the bus".

In an open letter to the prime minister, the owners of the St Moritz Hotel and Cowshed Spa in Trebetherick wrote that hotels were not "the icing on the hospitality cake" but the "load-bearing Victoria sponge". They asked Burnham to add hotels to the reduced rates list immediately.

The government has signalled further changes to business rates to ease pressure on the sector, but details remain uncertain. A government spokesperson said the chancellor had prioritised hospitality support in his first week, citing the 20% cut, a tax break on poured pints and a corporation tax cap. More than 330,000 people have signed a petition calling for VAT on hospitality to be cut from 20% to 10%, though critics say that would cost more than £10bn and largely benefit large chains.

Allen Simpson of UK Hospitality said he was "sure solutions for everybody else are coming", describing the rates cut as "an early start" that showed a direction of travel. Some venue owners remain cautious. Lou Tresidder, who runs the Driftwood Spars Hotel in St Agnes, welcomed the cut but said: "It's a lovely gesture, but it's not really going to make much impact to the survival of pubs around the UK, I don't think."