Chancellor dismisses calls to widen rates U-turn beyond pubs

Chancellor Rachel Reeves has indicated that previously pledged business rates relief would not extend beyond pubs while speaking at the World Economic Forum in Davos.

 

When asked about the level of support the government will give to businesses grappling with surging rates bills, the chancellor said that “the situation the pubs face is different from other parts of the hospitality sector”.

 

This comment deals a fresh blow to the wider hospitality sector – particularly hotels, who were labelled the “big losers” in the government’s hospitality rates overhaul by real estate services firm Colliers.

 

The government had previously signalled that it would help pubs to deal with the spike on business rates costs, which were announced in November’s budget and are due to come into effect in April, after publicans mounted a campaign banning Labour MPs from many premises.

 

But it is understood that the Treasury is reluctant to extend this support, which Reeves said earlier this month would be unveiled in “the next few days and weeks”, beyond pubs – despite hotels facing the steepest average rates increases across hospitality at large.

 

Research from Colliers found that hotels could see rateable values spike as much as 250% and will be hit with an average increase in rateable value of 77% under current plans, compared to 29% for pubs and 14% for restaurants.

 

Reeves’ comments at Davos come hot on the heels of an open letter which was sent to her by 130 of the UK’s biggest hotel and holiday park operators, including Whitbread, Hilton, Butlins and Haven, which called for hotels to be included in any rates relief package.

 

Allen Simpson, UKHospitality chief executive 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. Our hotels, restaurants and cafes, to name a few, all face their business rates bills increasing by thousands, driven by the same large increases to rateable values affecting pubs. These businesses employ six in seven people in hospitality.

 

“The government has one chance to get this right. Without a package of support for the entire sector, I fear it will be too little, too late.”

 

Figures from the Office for National Statistic released this week revealed that nearly 9,000 jobs have been lost from the hospitality sector since the Autumn Budget.