A climbdown on forthcoming increases to business rates bills faced by pubs is expected to be announced by the government in the coming days, following mounting pressure from landlords and hospitality industry groups.
Ministers are understood to be preparing changes to the way pubs’ business rates are calculated, which would result in smaller rises to bills than previously planned. Treasury officials have acknowledged the financial difficulties facing many pubs after sharp increases in the rateable value of licensed premises.
The move follows sustained lobbying from publicans and trade bodies, including a high-profile campaign in which more than 1,000 pubs across the country banned Labour MPs from their premises in protest at the planned hikes.
In her November Budget, Chancellor Rachel Reeves announced that business rates discounts introduced during the pandemic would be reduced from 75% to 40%, with the relief due to be removed entirely from April. The prospect of higher bills sparked widespread concern across the sector, already under pressure from rising costs and declining margins.
Local publicans have cautiously welcomed the apparent change of direction, while warning that more fundamental reform is still needed.
Lotte Lyster Connolly, owner of The Prince Albert, said: “We are delighted that the government seems to be listening to the licensed trade and hospitality, and re-thinking the proposed business rate hike that was planned. Pubs form an important social hub for many, especially in the Stroud area where small local shops are disappearing and folk need somewhere to meet their neighbours, friends and mix with others.
“We have had so many knocks, and with pubs disappearing at the rate of almost one a day last year, we can’t be pushed to hand over even more in taxes and higher bills. Maybe they will look at reducing the VAT on ‘going out’, as we, the licensed trade, have asked for every Budget.”
Greg Pilley, founder of Stroud Brewery, said the news brought some reassurance, but cautioned that details were still unclear. “It comes with some relief that the government is taking note of the challenges faced by hospitality. The extent of this relief is yet to be understood and we wait to see the scale of this change.
“We have to extend thanks to everybody – publicans, industry bodies and dedicated MPs – who continue to maintain pressure on government and highlight the significant role that hospitality plays in our community.”
Wesley Birch, who runs The Ship Inn and The Old Neighbourhood, said any assistance would be welcomed, but warned that limited changes may not be enough to reverse the sector’s fortunes.
“Any help from the government is welcome, but without confirmation of the actual discount, it’s hard to get excited. Our pubs and the wider hospitality sector have been pushed to the brink by recent policies.
“A small increase in rate relief isn’t enough to fix the damage; it only delays the inevitable. We don’t need just a ‘survival’ package — we need a plan that allows us to thrive once again.”
Luke Honeychurch, landlord of The Hog at Horsley, said the government must go further and commit to wholesale reform.
“Whilst I welcome the news that the Government are looking to perform a U-turn or watering-down of sorts, I want to be really clear – nothing short of a full-turn and urgent reform of the broken ratings system will be enough.
“Unless and until they promise, and deliver, that, the fight will go on.”
The government is expected to confirm details of the revised business rates approach in the coming days.
