Only pubs set to benefit from business rates U-turn as hoteliers barred
Pubs will be the only businesses to benefit from the government’s business rates U-turn as other hospitality firms will be shut out from tax relief, Rachel Reeves has hinted.
The Chancellor told reporters at Davos that pubs face a different situation to the rest of the sector, likely meaning hotels and other hospitality businesses will be given a cold shoulder by the Treasury.
This is the latest saga in a row between the government and the hospitality sector which erupted when it emerged after the Budget that pubs, bars and restaurants would face soaring business rate bills.
Reeves told reporters at the World Economic Forum on Wednesday: “The situation the pubs face is different from other parts of the hospitality sector but we will be setting out the detail in the next few days.”
A Treasury official confirmed the limited brief of the upcoming U-turn, telling the Financial Times: “this package is for pubs”. They insisted, however, that the government would continue to listen to the concerns of the wider sector.
Last week, Reeves confirmed temporary support for pubs in a climbdown from the Treasury’s previous position.
Hospitality figures had said that a combination of business rate revaluations and the end of Covid-era support could leave hospitality businesses across the country facing insolvency.
While the Chancellor maintained that pandemic-era aid would still be “unwound,” she signalled the speed of this withdrawal would be slowed to ease the pain faced by the sector.
Singling out pubs for relief ‘unfair’
Reeves’ remarks have been met with condemnation by people who claim pub-specific aid will fail to address the pain felt across British business.
Allen Simpson, chief executive of UKHospitality, said: “The entire hospitality sector faces the same cost challenges – from eye-watering business rates hikes to the soaring cost of employment. These are not challenges unique to pubs.”
Andrew Griffith, Conservative shadow business secretary, told the FT: “A U-turn which excludes the wider sector would be criminal. Many hotels and restaurants face even higher rates rises and their viability is equally at risk.”
Row over misleading claims
The announcement of temporary support followed a row over whether the government knew about the potential impact of the Budget’s reforms to business rates.
Business Secretary Peter Kyle had told Times Radio that his department “didn’t have access” to the relevant information and was only able to act after the Budget was met with outrage by the sector.
Jonathan Russell, who leads the Valuation Office Agency, responded by telling a select committee he was “very clear” with the Treasury about the impact of these changes.
Details of the support for pubs are set to be announced in the coming days.