The Treasury has announced a support package worth more than £80m a year for pubs and live music venues in England, following a fierce backlash against plans to overhaul business rates. Trade bodies had warned that Rachel Reeves’s changes, announced in the November budget, would trigger widespread closures and job losses in the hospitality sector, particularly in pubs.
On Tuesday, the government announced financial support to mitigate the effect of the rates shake-up, after officials admitted they had not foreseen its total financial impact. The package is expected to be worth more than £80m a year over three years for pubs and gig venues, applying only to England, with extra funding freed up for Scotland and Wales to follow suit.
While some in the pub industry gave the U-turn a cautious welcome, several trade bodies warned the measures did not go far enough and criticised the exclusion of other under-pressure businesses such as hotels and retailers. A group of publicans who have barred Labour MPs including Reeves from their premises said relief on rates was not enough to convince them to serve the chancellor a pint.
Dan Tomlinson, the exchequer secretary to the Treasury, said pubs in England would save an average of £1,650 each thanks to a 15% discount on their new business rates bill from 1 April, with bills then frozen in real terms for a further two years. Three-quarters of pubs will see their rates bill fall or stay the same next year, he said, while rates across the sector as a whole would be lower in 2028-29 than they are now.
Relief will only apply to pubs where customers can buy drinks without eating, and will not apply to hotels, whose rates will be reviewed separately. Local authorities will adjudicate on borderline cases. During the three-year period, the government will review the methodology used to calculate how much pubs should pay in rates, amid claims by the industry that it is unfairly penalised.
The British Beer and Pub Association’s chief executive, Emma McClarkin, said the 15% rate relief would 'provide certainty for tens of thousands of pubs' and there would be a 'sigh of relief from landlords across the country'. However, several trade bodies criticised the government for not going further, given cost pressures from rising wages, energy bills and VAT. The ale enthusiasts’ group Camra said it was 'shortsighted' to think that a temporary measure would save pubs facing the threat of closure.
