Chancellor Rachel Reeves has performed a partial climbdown in the escalating row over business rates, confirming plans for new "temporary support" for pubs facing crippling tax hikes. The announcement follows widespread anger from the hospitality sector and the extraordinary spectacle of publicans banning Labour MPs from their premises.
Treasury Warned of Rate Hike Impact
The Chancellor's move comes as the government's own chief property tax official claimed he warned the Treasury about the damaging consequences of business rate revaluations before the Budget. Jonathan Russell, head of the Valuation Office Agency (VOA), told the Treasury Select Committee he was "very clear" about the sector-level impact.
Russell stated his agency's briefings showed that for some sectors, bills would effectively double. He specifically noted that around 5,100 pubs in England would see increases in the region of 100%. This directly contradicts claims from Business Secretary Peter Kyle, who insisted the government "didn't have access to that information" and only became aware of the scale of the problem after the public outcry.
The Staggering Scale of the Increases
The core of the crisis stems from the end of pandemic-era financial support combined with a reassessment of property values. Analysis indicates the average business rates bill for a hospitality firm is set to soar by 94 per cent over three years. While the Budget included a £4.3bn support package, revaluations mean many pubs are still facing steep rises.
Trade body UK Hospitality estimates the average pub bill will still rise by £1,400 next year. The pain is particularly acute in certain areas; a City AM analysis found pubs in London's Square Mile will see their rateable value jump by an average of 16 per cent, or £16,836.
New Support and Industry Reaction
Facing intense pressure, Chancellor Reeves confirmed on Wednesday that further "temporary support" is being developed, with details due "in the next few days and weeks". She acknowledged to the BBC that "for some pubs there is still a big increase" and stated the government is working "intensely" on a solution.
Reeves defended the need to unwind Covid-era aid but signalled the withdrawal would be slowed. "We want to support our pubs. We want to support our high streets, and we’re doing that," she said.
The British Beer and Pub Association (BBPA) hailed the prospect of additional help as a "huge win" for landlords. The group said it could "save locals, jobs, and means publicans can breathe a huge sigh of relief," adding it had worked with ministers on a "pub specific solution".
A HM Treasury spokesperson reiterated the existing £4.3bn Budget support but confirmed: "We’ve since met with stakeholders and individual businesses, and we are determined to support the Great British Pub with further support."
