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. The package, expected to total over £300m over three years, aims to mitigate the financial impact of changes announced in Rachel Reeves' November budget.
Trade bodies had warned that the business rates shake-up would trigger widespread closures and job losses in the hospitality sector, particularly pubs. On Tuesday, the government admitted it had not foreseen the total financial impact and introduced relief measures, including a 15% discount on new business rates bills from 1 April, with bills frozen in real terms for a further two years.
Exchequer Secretary Dan Tomlinson said pubs in England would save an average of £1,650 each, with three-quarters seeing their rates bill fall or stay the same next year. Relief applies only to pubs where customers can buy drinks without eating, excluding hotels, which will be reviewed separately. Local authorities will adjudicate on borderline cases.
While some industry figures gave a cautious welcome, several trade bodies warned the measures did not go far enough. Emma McClarkin of the British Beer and Pub Association said the relief would provide certainty, but called for permanent reform. Camra described the temporary measure as 'shortsighted', and a group of landlords maintaining a ban on Labour MPs said rates reform was only part of their demands.
The hospitality sector faces intense pressure from rising wages, energy costs, and VAT. Analysis shows one pub a day closed in England and Wales last year, with the total number falling to 38,623. The government has also moved to overhaul pub licensing rules, including extended hours for the World Cup, but will not reduce VAT on alcoholic drinks.
