Chancellor Rachel Reeves has been accused of hammering Britain’s pubs after blocking new financial help, even as Keir Starmer admits thousands of locals are facing a fight for survival.
The Chancellor is ending Covid era business rates relief in April, piling fresh pressure on pubs, bars and restaurants already struggling with soaring costs. The support, once worth 75 per cent, was cut to 40 per cent and will now be scrapped altogether.
At the same time, a business rates revaluation means some village pubs will be forced to pay the tax for the first time, while many others face sharp rises after six years without reassessment.
The move has sparked fury across the country, with Labour MPs reportedly barred from dozens of pubs and restaurants. Ms Reeves herself has been banned from her local pub in Pudsey, West Yorkshire, a symbolic snub from an industry she is accused of ignoring.
Despite the growing backlash, the Treasury is refusing to budge. That stance puts Ms Reeves at odds with her own Prime Minister, who has publicly conceded that many pubs will struggle under the changes.
Speaking on LBC on Monday, Starmer said: “We’re talking to the sector, particularly hospitality and pubs, about what further support we can put in, whether that’s licencing freedoms or other measures.”
But Treasury insiders have poured cold water on any hope of real help, insisting there will be no change to the tax policy itself. Licencing tweaks, they say, will not reduce the business rates bills hitting pub owners.
Peter Kyle, the Business Secretary, has come under intense pressure from the hospitality industry to wrest concessions from the Chancellor. Celebrity chef Tom Kerridge said Mr Kyle was sympathetic but powerless while the Treasury holds the purse strings.
Mr Kerridge told LBC: “[From] the conversation with Peter that isn’t something that he has control over. That sits in Treasury. He has a meeting with the Treasury next week. He’s presenting the case. He was incredibly supportive.”
Sir Keir also talked up support for pubs during his first public event of the New Year, focused on the cost of living. He told GB News: “We’re working with the sector, particularly in hospitality. Obviously, there were reductions [in business rates] in place because of Covid, which were going to come to an end.
“There are then transitional provisions to help. The overall rating level is going down but I do acknowledge, for pubs and others, that the revaluation means that they will struggle in relation to the business rates applicable to them. That’s why we’re working with them.”
Those comments briefly raised hopes that Labour might rethink the discount affecting around 75,000 pubs, bars, restaurants and hotels in England. The optimism was fuelled by the Government’s recent U turn after a year long row with farmers over inheritance tax.
But any chance of a climbdown was swiftly dashed. Treasury sources stressed that Ms Reeves is not prepared to change the tax rate itself, no matter how loud the warnings from the industry.
Before the Budget, ministers had hinted at a discount of up to 20p for pubs, restaurants and hotels. In the end, the Chancellor offered just 5p, triggering frantic lobbying and emergency meetings with officials in Downing Street and the Treasury.
The changes come on top of the first effective revaluation of hospitality premises for six years, which on its own would push bills higher. The Treasury insists that transition measures, including a cap limiting increases to 15 per cent next year, are enough to soften the blow.
Industry leaders say that is nowhere near sufficient and warn that licencing freedoms will not stop closures.
As reported in the Telegraph, a spokesman for UK Hospitality said: “Nothing less than a rethink on business rates will solve the problem. Licencing and planning reforms don’t help. They are useful but they are not sufficient to offset the tax increases. The question remains whether the Government will move fast enough and far enough.”
Since taking office in July 2024, Ms Reeves has signed off more than £60bn a year in tax rises across two Budgets. Several of her headline policies, including scrapping the universal winter fuel payment and capping inheritance tax relief for farmers, have already been watered down after voter anger.
A Treasury spokesman defended the approach, saying: “We’re protecting pubs, restaurants and cafés with the Budget’s £4.3bn support package. Without this support, pubs would face a 45 per cent increase in the total bills they pay next year.
“Because of the support we’ve put in place, we’ve got that down to just 4 per cent. This comes on top of our efforts to ease licencing to help more venues offer pavement drinks and put on one off events, maintaining our cut to alcohol duty on draught pints, and capping Corporation Tax.”
For pub landlords staring at bigger bills, those claims will offer little comfort, as Labour’s tax grip tightens and Britain’s boozers brace for the worst.
