The credibility of Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves has taken a severe hit following a dramatic government U-turn on business rates for pubs, according to Conservative leader Kemi Badenoch.
A Dramatic Policy Reversal
Ministers are preparing to water down a significant reform to business rates for the hospitality sector after facing a fierce backlash. The proposed changes, announced in the Autumn Budget, would have left many pubs facing a substantial increase in their overall bills, despite a promised 5p cut for hospitality firms.
The backlash was intense, with thousands of publicans reportedly barring Labour MPs from their premises in protest. Following multiple reports, Treasury officials are now set to row back on the tax changes.
'Chaotic Reversals' Blow Hole in Budget
Tory leader Kemi Badenoch seized on the reversal, criticising what she called continuous "chaotic reversals" from the Labour government. She warned these U-turns had blown a "big hole" in Rachel Reeves's financial plans and rendered November's Budget "all but pointless".
"Anything the government announces is liable to be junked soon after," Badenoch stated, arguing the Prime Minister and Chancellor's credibility was now "shot".
This marks the latest in a series of high-profile policy reversals by the Labour administration, following changes to welfare reform, winter fuel allowances, inheritance tax, and key parts of the workers' rights bill.
Poll Woes and Treasury Admissions
The controversy adds to a growing pile of frustrations for the government. A recent YouGov poll revealed public disapproval has reached a record low, with net approval slumping to -59. Sir Keir Starmer has pledged to face down any leadership challenges in 2026 as Labour braces for difficult local elections in May.
Meanwhile, the Treasury has admitted it was unaware of the full impact of the business rates changes. A Treasury source told Sky News the true effect only became clear after speaking to businesses post-announcement.
"There's a big discrepancy between the significant winners and losers and that's not how it should be," the source conceded.
In contrast, Labour Party chair Anna Turley insisted the forthcoming announcement was not a U-turn, but a sign of a government "listening" and in touch with the public, calling it a mark of a "confident government".
