Ministers to offer business rates relief to pubs after backlash
Panicked ministers are poised to water down the business rates bombshell faced by pubs, after an aggressive backlash from the industry saw over a thousand landlords ban Labour MPs from their premises.
The government is expected to announce an overhaul to the way it calculates business rates for pubs within days, which it says will help soften the sharp hikes that a majority the embattled sector faced in the aftermath of the Budget.
According to multiple reports, Treasury officials have conceded its overhaul to business rates – the commercial equivalent to council tax – left many local pubs facing a huge hike in their overall bill, despite the hospitality industry technically being offered 5p cut.
At November’s Budget, the Chancellor scaled back the business rate discounts that businesses have enjoyed since the pandemic. It also confirmed the results of a much-anticipated re-evaluation of so-called rateable values, a central government estimate for the amount of rent a site will pay in a year, which left pubs across the country facing considerably larger bills.
The result of the re-rating sparked uproar and weeks of dogged campaigning, which was already among the worst affected by consecutive rises to minimum wage and the ill-fated payroll tax grab announced in the government’s maiden Budget.
Thousands of landlords, including former Top Gear presenter Jeremy Clarkson, joined a grassroots campaign banning Labour politicians from their sites over Christmas. Other famous publicans like chef Tom Kerridge have urged ministers to step in to prevent reams of locals hitting the wall.
Emma McClarkin, chief executive of the British Beer and Pub Association, hailed the government’s decision to reopen the business rates increases, branding a “huge win for pubs across the country”.
“This could save locals, jobs, and means publicans can breathe a huge sigh of relief,” she added. “The BBPA has worked closely with ministers on a pub-specific solution that would ensure that bills are reduced in line with the government’s previous promise to pubs.”
Pubs package constitutes major climbdown
Any package for pubs would constitute a major climbdown from ministers, less than two months after Chancellor Rachel Reeves delivered her second Budget. In recent history, only George Osborne’s famous ‘omnishambles’ Budget in 2010 was re-opened to force through changes, after his plans to apply VAT to hot food – dubbed the pasty tax – triggered a similar rearguard action.
But the government remains vulnerable to further complaints from the wider hospitality industry – including hotels and entertainment venues – which under the leaked proposals will not be included in the new package ring-fenced for pubs.
UK Hospitality chair Kate Nicholls warned ministers that the entire sector is affected by the hikes, urged them to consider a “hospitality-wide solution”.
“The government should implement the maximum possible 20p discount to the multiplier for all hospitality properties,” she said, referring to the rate at which business rates are charged.
Jon Collins, chief executive of music venue industry body LIVE, said: “If the government is preparing a U-turn on business rates for pubs, it must not leave live events and arenas behind. From grassroots venues to arenas, operators are already facing increases of up to 400 per cent, putting venues of every size under severe financial strain
“The Treasury must urgently review this policy before it causes lasting damage to one of the UK’s most economically productive sectors.”
The Treasury was approached for comment.