Government Prepares £300m Lifeline for Pubs Facing Business Rates Crisis
In a significant move to avert mass closures, the Treasury is understood to be preparing a substantial £300 million support package specifically aimed at keeping British pubs afloat. This intervention comes after weeks of dire warnings from the hospitality sector about a looming spike in business rates that threatens to cripple many establishments.
The End of Pandemic Relief and Mounting Pressure
During the Covid-19 pandemic, hospitality businesses received crucial support in the form of a 40% discount on business rates to help them survive the devastating impact of lockdown restrictions. However, in November's Budget, Chancellor Rachel Reeves confirmed that this temporary relief measure would be coming to an end, leaving countless businesses facing a steep and sudden increase in their operational costs.
While the Chancellor announced that a lower multiplier would be used to calculate the tax, this adjustment was more than offset by the overall increase in bills. The resulting financial strain has been so severe that many Labour MPs, including Reeves herself, have reportedly been barred from their local pubs by furious landlords protesting the impending rate hikes.
Details of the Proposed Support Package
The Treasury's proposed £300 million package is believed to involve distributing £100 million annually to the pub sector until 2029. Treasury minister Daniel Tomlinson is expected to outline the full details in a statement to the House of Commons this afternoon, providing much-needed clarity for publicans across the country.
Speaking at the World Economic Forum meeting in Davos last week, Chancellor Reeves defended the decision to focus rates relief specifically on pubs. 'I do recognise the particular challenge that pubs face at the moment, and so have been working with the sector over the last few weeks to make sure that the right support is in place,' she stated. 'I think the situation the pubs face is different from other parts of the hospitality sector.'
Concerns for Other Hospitality Businesses
Despite this targeted support for pubs, there are growing concerns that other hospitality businesses – including hotels, restaurants, and cafes – will miss out on similar assistance despite facing potentially catastrophic increases in their business rate bills.
According to statistics from UKHospitality, the average business rate bill for hotels in England is set to increase by a staggering 115% over the next three years, equating to an additional £111,300 per establishment. The industry body has also reported that more than 20,000 fewer people were employed by the hospitality industry in December 2025 compared to the previous September, a decline it attributes directly to the rising tax burden.
The Broader Context and Sector Response
The proposed support package represents a crucial intervention at a time when many pubs are struggling to recover from the pandemic's aftermath while facing new economic challenges. The hospitality sector has been vocal about the need for government assistance, arguing that pubs serve as vital community hubs that contribute significantly to local economies and social cohesion.
As the details of the support package are finalized and announced, publicans across the UK will be watching closely to understand how the funds will be distributed and what criteria will determine eligibility. The success of this intervention could determine whether many beloved local establishments survive the current economic pressures or join the growing list of hospitality businesses forced to close their doors permanently.
