Calls for hospitality-wide relief as government mulls business rates U-turn

The government is being urged to implement a hospitality-wide solution on business rates amid reports of a climbdown on forthcoming increases for pubs.

 

The BBC reported the government is considering making changes to how pubs’ business rates are calculated in light of the sharp increases to rateable values.

 

An announcement is expected in the coming days after pressure on the government from its own MPs and the hospitality industry, who have pointed out the existrential threat to businesses across the country. 

 

A treasury spokesperson told The Caterer that the department had listened to the concenrs of the sector and revisited its figures, though this was currently only in relation to pubs.

 

Kate Nicholls, chair of UKHospitality, said: “The entire hospitality sector is affected by these hikes - from pubs and hotels to restaurants and cafés. 

 

“We need a hospitality-wide solution, which is why the government should implement the maximum possible 20p discount to the multiplier for all hospitality properties.”

 

Kenny Atkinson, owner and chef patron at one-Michelin-starred Newcastle restaurant House of Tides, Solstice by Kenny Atkinson and new London venture Solaya, also told The Caterer the industry is "all intertwined – you can’t categorise one and not the other, because we’re all in the same boat".

 

Like other operators, his business rates have gone up significantly. His quayside Solstice site in Newcastle has seen rates go from £50,000 to £90,000, in addition to a £100,000 increase in wage bills as a result of the rise in NI and National Living Wage.

 

Treasury officials are believed to have recognised the financial difficulties facing many pubs following the proposals announced in Rachel Reeves’ November Budget, during which she scaled back on Covid-era business rates discounts.

 

According to the BBC, the government could be expected to reduce the multiplier used to calculate business rates or boost the £4.3b transitional relief scheme brought into ease the impact of limited post-pandemic support.

 

During the Budget, it was announced that from 2026-2027, smaller and standard retail, hospitality and leisure (RHL) businesses will have multipliers of 38.2p and 43p applied to their bills, a 5p cut on the national rates. 

 

However, the rateable values of many hospitality venues have increased significantly since the last round of valuations took place during the pandemic.

 

In December, hospitality operators told The Caterer they felt “gaslit” by the proposed business rates changes and more than 1,000 pubs are believed to have participated in a campaign banning Labour MPs from their premises since the Budget.

 

The anger over business rates has shown no signs of abating, with Jonathan Neame, chief executive of Shepherd Neame, telling The Times this week there was a “real risk that Rachel Reeves is doing to our sector what Margaret Thatcher did to the miners”.

 

During yesterday’s PMQs, a Labour MP urged Prime Minister Keir Starmer to “urgently review the business rates proposals” to avoid a crisis on high streets across the country.

 

His comments follow his admission in an interview with LBC on Monday 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. 

 

Emma McClarkin, chief executive of the British Beer and Pub Association, said: “News that the government is going to look again at business rates increases is potentially a huge win for pubs across the country and shows government have not only listened to our concerns but acted. This could save locals, jobs, and means publicans can breathe a huge sigh of relief. 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 promises to pubs. We now keenly await to see the detail of the upcoming announcement."

 

The Caterer understands Reeves had commissioned a review for a further support package for pubs before Christmas following intense lobbying from the industry and a reassessment of available data on post-pandemic rateable values.

 

It is believed further details regarding a pubs-specific support package will be revealed in the coming days. This is expected to consist of long-term changes on how business rates are calculated alongside short-term revaluation relief. 

 

The Caterer understands the support as it stands will be limited to premises that fall under the legal definition of a pub.