Pubs given support package after business rates backlash

Pubs and music venues in England will be given a 15% discount on their business rates bills from April and will not see increases for two years, the government has announced.

Treasury Minister Dan Tomlinson said the three-year package would be worth £1,650 for the average pub in 2026/27.

It comes after a backlash against November’s Budget, which left many facing major increases in their business rates bills, and led to more than a thousand pubs banning Labour MPs from their premises.

UK Hospitality has warned that hotels, restaurants and other businesses in the sector are also at risk, calling for the support package to be widened.

According to the government, the package will cost £80m in its first year, and the subsequent two years will be valued by the Office for Budget Responsibility (OBR).

Tomlinson said pubs are “the cornerstone of so many communities” and the government wanted to “go further” in supporting them after the number of venues fell by nearly 7,000 since 2010.

The government also promised to review how pubs are valued by the Valuation Office Agency (VOA), ahead of the next revaluation of premises in 2029.

Shadow Chancellor Mel Stride dismissed the announcement and described it as a “sticking plaster”, asking: “Is this it?”

“After weeks of telling our local pubs that help was on the way, this is all they get.”

He said the measures would “only delay the pain for a while” before warning that “thousands of businesses despair as their bills skyrocket”.

Liberal Democrat Treasury spokesperson Daisy Cooper said the financial aid still left pubs facing higher business rates bills, and it did “nothing at all” for other high street businesses.

She called for the government to increase business rates discounts for all retail, hospitality and leisure businesses, and for an “emergency” VAT cut for the hospitality sector for a year.

Chris Tulloch, managing director of Blind Tiger Inns, said the measures were not “a rescue package nor a lifeline”.

He runs 23 pubs across the north west of England including in Burnley, Manchester and The Wirral, and employs 250 staff.

“It’s almost like the government are saying to pubs ‘we were going to shoot you and now we’re not’,” he told the BBC.

“It’s not making things better, it just means things won’t go quite as bad quite as quickly.”

Within the last 24 months, his profit margins have decreased by around 25% as labour costs and business rates rise, despite his pubs seeing more footfall and revenue in recent years. It’s all because of rising costs such as National Insurance contributions, he says.

The latest relief means his costs are still going to rise, despite the discount, he says.

Tulloch prefers to see a total reform of the business rates system because the “current hospitality crisis is worse for us than Covid”, when many venues had to stop operating to stem the spread of the virus.

He says that pubs are currently limiting investment in their businesses because of the high costs of day-to-day operations.

It means, he says, the industry will see problems worsen in the future as government discounts come to an end.

“Pubs won’t expand, end up hiring less staff, and make less profit,” he says.

UK Hospitality, which represents the wider sector, said the measures “address an acute challenge facing pubs”.

“The reality remains that we still have restaurants and hotels facing severe challenges from successive Budgets,” chair Kate Nicholls said.

The British Beer and Pub Association (BBPA) said it would “stave off the immediate financial threat posed by accelerating business costs and will help keep the doors open for many”.

BBPA chief executive Emma McClarkin says landlords across the country will “breathe a sigh of relief”, but the organisation’s focus will now turn to long-term reforms to business rates.

Bosses from across the hospitality sector had warned that, despite tweaks in the chancellor’s November Budget, they were facing an increase in their business rates bills from April.

This is because, although the government has lowered the multipliers – a figure used to work out how much businesses pay in rates – many pubs, restaurants and hotels are still seeing their bills go up due to their properties being revalued, and the new values were often much higher.

On top of the rise in property valuations, small retail, hospitality and leisure businesses in receipt of discounts that have been in force since the pandemic, which dropped from 75% to 40% in November, will no longer receive this rebate from April.

Industry body UK Hospitality warned the average pub’s business rates bill would increase by 76% over the next three years without a package of support.

The government had already announced a £4.3bn fund to help businesses as rates relief is phased out.

Tuesday’s additional package means that three in four pubs will see their business rates bills fall or stay the same next year, the government said.

As part of a further bid to support struggling pubs, the government is planning to allow them and other licensed venues to stay open after midnight when home nations teams play in this summer’s men’s World Cup.