Andy Burnham’s promise to overhaul business rates in favour of Britain’s high streets comes with a price tag, and it is a substantial one.

New analysis suggests his flagship proposal to expand small business rates relief would cost the Exchequer approximately £880 million a year, raising fresh questions over who ultimately picks up the bill.

The Greater Manchester mayor has repeatedly argued there is “room for movement on tax” within Labour’s manifesto commitments, pledging a business rates cut for pubs and high street firms while insisting he would stay within the party’s fiscal rules.

Central to that agenda is a proposal, first floated during the Makerfield by-election campaign and repeated in his LBC interview last week, to raise the threshold for 100 per cent small business rates relief in England by 50 per cent, from a rateable value of £12,000 to £18,000, with the upper taper threshold rising from £15,000 to £21,000.

Forecasts from global tax firm Ryan suggest the change would lift more than 140,000 additional small premises out of paying business rates altogether. The move would be welcomed by campaigners: the Federation of Small Businesses has already warned that 104,000 small firms were dragged into the rates net when the threshold freeze collided with April’s revaluation.

But the arithmetic is the problem. Alex Probyn, practice leader for Europe and Asia-Pacific 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. 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.”

Throughout the Makerfield campaign, Burnham argued that “online giants” should pay more through higher taxes on large warehouses. In his LBC interview following this week’s keynote speech, he repeated the case for higher rates on warehouses and major out-of-town developments to fund lower bills for pubs and to lift certain small businesses out of rates altogether.

The mechanism to do so already exists. The Government’s reforms introduced in April 2026 included a 2.8p surtax on properties with rateable values above £500,000 in England, and the enabling legislation allows ministers to raise that levy to as much as 10p without creating a new tax.

The catch, Ryan points out, is that the surtax is not a warehouse tax. It applies to offices, manufacturing sites, logistics assets, airports, data centres and larger retail premises alike. Any increase would land across that far broader base unless the Government designed an entirely new approach.

“The attraction of increasing the existing surtax is obvious,” Probyn added. “It provides an established mechanism for funding additional reliefs elsewhere in the system. The risk is that higher property taxes increase the cost of occupying and investing in many of the sectors that underpin investment, jobs and economic growth. The primary issue remains that property taxes are now too high.”

There is a constitutional wrinkle too. Business rates are already devolved to Scotland, Wales and Northern Ireland, and with devolution at the centre of Burnham’s wider economic agenda, the debate may increasingly turn not only on how rates are reformed in England, but on who ultimately controls one of the country’s most significant business taxes.