PM pledges ‘further support’ as business rates backlash mounts

Prime Minister Keir Starmer has reaffirmed the government will consider “further support” for independent business owners struggling with business rates.

During the maiden PMQs for 2026 held on Wednesday afternoon, Starmer was urged by Labour MP for York Central Rachel Muskell to review the business rate proposals announced in November’s Budget.

She said: “Having met with many independent business owners, they fear the cumulative impact of the rateable value revision and relief reductions.

“In York, hospitality sees an average business rate rise of 41%, a music venue 44.4% and many independent shops increases around 27%. It will mean doors closing and trade ceasing. They just can’t do it.”

Muskell called on the Prime Minister to “urgently review the business rate proposals” to “avert a crisis on York’s high street”.

In his response, Starmer reiterated that phasing out the business rate levels introduced during the Covid pandemic was inevitable, but stressed that the government has put in place interim relief while operators transition into the new business rates system starting from April 2026.

He added: “Mr Speaker, we are continuing to work with and talk to the sector on that support and what further support and action we can take.”

The Prime Minister’s comments follow his admission in an interview with LBC earlier this week that pubs will struggle with business rates in the next round of revaluations and that the government was looking at licencing freedoms in an effort to support the sector.

The FT reported that treasury ministers were in talks with the industry to explore options for concessions to defuse the growing dispute. 

Over the last two months, the hospitality industry has criticised the Labour government for piling pressure on an already squeezed sector, with growing calls from pub landlords to bar Labour MPs from their establishments. 

Earlier this week, chef Tom Kerridge told LBC that the new rateable values at his Michelin-starred Coach in Marlow had risen 100% from £50,00 to £106,000 and that the industry as a whole was “not in a good place”.

Meanwhile, Jonathan Neame, chief executive of Shepherd Neame, told The Times there is a “real risk that Rachel Reeves is doing to our sector what Margaret Thatcher did to the miners”.

Beyond hospitality, an open letter calling for an urgent review of the impact of the business rates revaluation on small business launched by MP for Great Yarmouth Rupert Lowe yesterday (6 January) has already reached 3,000 signatories at the time of writing.

He said in a post on Facebook: “I have been contacted by SO many business owners – publicans, cafe owners, whoever. In tears. Desperate. Scared.

“People, and MPs, do NOT understand what is going to happen to thousands of businesses. I am stunned at how little attention there is on this.”

The Treasury has stressed that operators have access to a £3.2b Transitional Relief scheme over the next three years and that the scheme will support those facing large bill increases at the revaluation.