Budget 2026: A breakdown of key announcements for West End businesses

Wednesday 28 October 

The Chancellor’s Autumn Budget this week set out measures to support high streets, ease household costs and give local leaders greater control over economic development. But for many businesses in the West End, significant challenges remain, from high business rates and rising operating costs to the need to protect London’s international competitiveness. 

While we welcome support where it helps businesses, the Budget falls short of the wider action needed to support economic growth, address the structural costs facing city-centre businesses and ensure London receives the investment required to sustain its economic contribution and competitiveness. 

Here we highlight some of the key announcements for West End businesses and the priorities we will continue to champion. 

To discuss any of the changes made, please speak with your HOLBA Account Manager or get in touch at hello@holba.london.    

The key announcements 

Fiscal devolution: an opportunity for London 

The Government has committed to greater fiscal devolution, as set out in their Fiscal Devolution Roadmap. It sets out plans for local retention of business rates revenue, alongside income tax revenue-sharing for mayors and additional funding for local growth. It has also recognised that London may need bespoke arrangements to reflect its distinct governance and funding structures. 

The West End is a nationally significant economic and visitor destination. Its businesses support jobs across retail, hospitality, tourism and culture, while high visitor numbers place exceptional demands on public spaces, transport, safety and local services. 

While we welcome the Government's commitment to greater fiscal devolution, it must ultimately unlock economic growth, support investment, create jobs and strengthen local competitiveness. Any London-specific funding framework must recognise the West End's significant economic contribution and the exceptional pressures arising from its high visitor numbers and demands on local services and infrastructure. It must also ensure that areas generating substantial economic activity receive the investment needed to sustain and grow their contribution. Importantly, greater local retention should complement fundamental business rates reform, rather than result in additional taxes or charges on businesses. 

Visitor economy: protecting London’s competitiveness 

The Budget confirms new powers for strategic authorities to introduce an Overnight Visitor Levy, with local leaders expected to set out plans by March 2028. We remain opposed to the levy in principle in the current economic conditions, given the potential impact on visitor costs and London's international competitiveness. 

If the levy proceeds, its design must be informed by meaningful consultation with businesses, proportionate charging arrangements and transparent reinvestment of revenues in the destinations that generate them. 

The Government will also be publishing a Visitor Economy Growth Strategy, which, alongside the Hope for the High Street strategy published today, presents an important opportunity to develop a more joined-up approach to supporting tourism, high streets and local economic growth. The forthcoming strategy must build on this commitment, recognising the West End's significant contribution to the national economy and addressing the challenges facing established visitor destinations, while supporting investment, job creation and London's international competitiveness. 

Business rates: relief for some, but fundamental reform still needed 

The Budget raises the business rates relief threshold for qualifying retail, hospitality and leisure properties from £12,000 to £18,000 in rateable value. It also extends transitional relief and introduces measures to strengthen VAT compliance among online marketplaces. 

These measures offer welcome support to some smaller businesses. However, the impact across much of the West End is likely to be limited, as many local properties have significantly higher rateable values and will continue to face substantial property costs. 

We have been leading the call for business rates reform that works for businesses of all sizes across the UK. The current system can penalise investment in physical premises, even when businesses are creating jobs and contributing to economic growth. We are calling on the Government to commit to a comprehensive review that delivers a fairer system fit for a modern economy. 

Employment and operating costs 

The National Living Wage will increase by 3.9%, while alcohol duty will rise in line with inflation. The Budget also includes £10 million in relief for smaller British brewers and cider makers. 

Measures to reduce household energy costs, extend the 5p fuel duty reduction and suspend tariffs on more than 100 supermarket products could help household budgets and consumer confidence. However, they do not directly resolve the commercial cost pressures facing many businesses. 

Rough sleeping: turning funding into local action 

The Government has committed an additional £430 million to support people sleeping rough throughout the remainder of Parliament. 

We welcome the recognition that tackling rough sleeping requires sustained investment. The priority now is ensuring that funding translates into effective local delivery, bringing together Westminster City Council, outreach services, health providers and other partners to provide accommodation and longer-term support. This is important for people experiencing homelessness and for the wider wellbeing of our streets and public spaces. 

What does this mean for West End businesses? 

This year's Budget acknowledges the pressures facing high streets and presents opportunities to unlock locally driven growth through greater fiscal devolution and investment. However, important questions remain about how national policy will support London’s economic contribution and the businesses that sustain it. 

Three priorities stand out for the West End: 

• A fairer business rates system. Targeted relief is welcome, but meaningful reform is needed to address structural costs, support investment and strengthen competitiveness. 
• Funding that reflects London’s needs. Greater fiscal devolution must recognise the demands placed on the West End by its economic activity and visitor numbers, ensuring investment reaches the places that need it. 
• A competitive visitor economy. The forthcoming Visitor Economy Growth Strategy presents an opportunity to strengthen London's competitiveness, ensuring that taxation and tourism policies support businesses that attract visitors, create jobs and contribute to the wider economy. 

The Office for Budget Responsibility forecasts growth of 1.2% in 2026, slowing to 1% in 2027. The downgraded growth forecast underlines the importance of creating the right conditions for businesses to invest, create jobs and drive economic growth.

What happens next? 

We will continue to engage with the Government, the Mayor of London, Westminster City Council and our wider business partners to ensure the priorities of West End businesses are heard. 

We will keep pressing for fundamental business rates reform, a funding framework that recognises the West End’s distinct economic contribution, effective action to tackle rough sleeping and policies that protect London’s competitiveness as an international visitor destination.

To discuss any of the changes made, please speak with your HOLBA Account Manager or get in touch at hello@holba.london.