Retailers have warned Andy Burnham’s plan to cut business rates for high street venues by taxing warehouses could end up piling further cost pressure on supermarkets, department stores and major retail supply chains.

Burnham has proposed a 20 per cent business rates cut for pubs, clubs and music venues, funded by higher rates on warehouses and other large commercial sites.

He has previously said the policy would target “online tech companies and their warehouses”, arguing that the high street “really needs to get more of our attention”.

However, analysis by tax firm Ryan has raised doubts over whether a warehouse levy would raise enough money to fund the planned relief.

The firm found there are only 1,900 large warehouses in England already paying the top business rate, with just 129 operated by online-only retailers.

Ryan said even doubling the top rate on warehouses would be unlikely to raise enough to cover Burnham’s proposed cut.

Retailers are concerned that, in practice, the policy could be widened to include a surcharge on 17,000 of the UK’s largest and highest-value commercial properties.

That could drag supermarkets, department stores and other large retail sites into the scope of higher taxation, despite the plan being positioned as a way to rebalance the burden between online giants and the high street.

Alex Probyn, practice leader on property tax at Ryan, said using existing legislation to increase the surcharge by the maximum possible amount “could generate approximately £1.32bn of additional annual revenue without introducing an entirely new tax”.

However, one retail chief executive warned the move risked becoming another “rearranging of the deckchairs” rather than a meaningful reform of the business rates system.

Another FTSE 100 retail boss said he could support higher rates on warehouses in principle, because stores currently pay a disproportionate share of property taxes.

However, he warned that a wider charge on large commercial properties could “crucify the supermarkets” and ultimately feed through into higher prices for customers.

“Punishing ‘big boxes’ means they are punishing the customers of big boxes, which is pretty much everyone,” he said.

High street retailers have long argued that business rates place an unfair burden on store-based operators, while online rivals have been able to grow with lower property costs.

However, industry figures have warned that targeting warehouses could also hit the very retailers the policy is intended to support, given modern store networks rely heavily on distribution centres to serve both shops and ecommerce customers.

The top 10 most valuable warehouses in the UK include sites owned by Next, Lidl, Tesco, John Lewis, Sports Direct and Marks & Spencer, alongside three operated by Amazon.

Warehouse operators have already seen their business rates bills rise by 58 per cent over the past three years.

Amazon paid £190m in business rates last year on £8.26bn of revenue in its largest UK services business, which includes its retail arm. Tesco, which operates 2,500 shops in England, pays around £700m in business rates on £70bn of revenue, while M&S pays about £170m on £17bn of revenue.

Robert Taylor, head of research at real estate adviser DTRE, said warehouses had become “the engine of the modern high street”, including for independent retailers.

“Taxing the one part of the property market that has consistently delivered development, jobs and rates of growth to subsidise another is a political trade,” he said.

British Retail Consortium chief executive Helen Dickinson said Burnham was “right to focus on high street regeneration” but said it remained unclear how the policy would work in practice.

The debate comes as retailers continue to push for broader reform of business rates, after Labour introduced new bands at the last Budget that increased relief for smaller properties while adding a surcharge on properties valued at more than £500,000.

Supermarkets previously lobbied against a steeper surcharge, warning it would add to inflationary pressure as the sector faces higher employment and operating costs.

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