Prime Minister admits pubs will struggle with business rates

Chancellor Rachel Reeves is reportedly blocking financial support for pubs despite Keir Starmer having acknowledged the industry will struggle with new business rates.

 

Earlier this week, Starmer told LBC that government discussions with the hospitality industry are ongoing about providing “further support” for firms hit hard by higher business rates.

 

He said: “Obviously, what’s happened is there were reductions in place during Covid which were always going to be unwound. At some point, the overall rates are going to be lower. But I accept that because of revaluation, that means that some will have their bills going up.”

 

Chef Tom Kerridge also told LBC yesterday (5 January) that the new rateable values at his Michelin-starred Coach in Marlow had risen 100% from £50,00 to £106,000, to which business secretary Peter Kyle had responded with “concern and understanding”.

 

The chef revealed to the radio station that Kyle has a meeting with the Treasury next week, but that any moves to ease the business rates burden remains with the chancellor.

 

GB News has since reported that Treasury sources have already tempered hopes of any cut to business rates.

 

The paper added: “Officials remain confident that transitional measures, including a 15% cap on bill increases next year, will be sufficient for pubs affected by the reforms.

 

“Before the Budget, ministers had hinted at a possible 20p discount for hospitality businesses, but the final announcement delivered just 5p, sparking intense lobbying.”

 

The Telegraph also reported Reeves will end Covid-era business rates relief in April, which would pile further pressure on hospitality businesses.

 

Some village pubs are also having to face the prospect of paying business rates for the first time as a result of increases to their rateable values, plans for which were announced in November’s Budget.

 

Late last year, the Larder House pub in Bournemouth started a campaign to ban Labour MPs from their venues in response to the government’s Budget, which has since spread to pubs across the country.

 

During her speech, the chancellor reconfirmed plans to introduce permanently lower tax rates for more than 750,000 retail, hospitality and leisure properties in England from 2026/27. This will be paid for by a higher multiplier on properties worth over £500,000.

 

The government also confirmed that the current 40% retail, hospitality and leisure discount, capped at £110,000 per business, will end on 31 March 2026. This will be replaced by a new system in which the multipliers are set 5p lower than the standard rate with no cap in financial support.

 

The Caterer understands the chancellor has no plans to block further business rates support and that the Treasury and the Department for Business and Trade will continue to work together on regulatory reforms, particularly around licensing.  

 

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.