Prime Minister Sir Keir Starmer has pledged that his government will ensure pubs receive the support they need, following a significant outcry over an impending rise in business rates.
Budget Climbdown After Sector Outcry
The commitment marks a climbdown from a previous Budget decision and comes after intense lobbying from the pub and hospitality industry. Chancellor Rachel Reeves stated that pubs would receive "more temporary support" to manage the transition.
The rate increase is driven by a dual effect: a general revaluation of properties and the withdrawal of Covid-era discounts, a move announced by Ms Reeves in November. While a £4.3 billion fund was already established to ease the transition, the Chancellor acknowledged that "for some pubs there is still a big increase".
She confirmed that additional financial aid is being finalised, with a formal announcement expected "in the next few days and weeks". This policy shift is among several recent adjustments by Sir Keir's government, which recently included a rowback on mandatory digital IDs.
PMQs Clash and Focus on Pubs
The issue came to a head during Prime Minister's Questions on Wednesday 14 January 2026. Tory leader Kemi Badenoch challenged Sir Keir over the U-turns, questioning whether there would be any change to business rates she claimed had been doubled "for thousands of pubs" in the Budget.
Sir Keir responded, "We're working with the sector to ensure that they get the support that they need." He then turned to attack the Conservative record, highlighting the 7,000 pubs he said closed under the previous government.
However, the Prime Minister and Chancellor appear to be resisting calls to extend this new financial aid to the wider hospitality sector. Ms Reeves argued that the "biggest concern right now is around pubs", which were uniquely impacted during pandemic lockdowns.
Chancellor Defines the Scope of Support
In media appearances, Rachel Reeves elaborated on the government's position. She told BBC Breakfast that while the pandemic-era support could not be kept forever as it was "not affordable" with the government "still borrowing too much", the pace of withdrawal was critical.
She explained the rationale for focusing on pubs, noting that during the pandemic, "their valuations collapsed, and as a result their business rates payable fell." Now, as valuations rebound and temporary relief ends, their tax burden is rising sharply compared to other high street businesses that stayed open.
Later in Leeds, when asked if cafes, independent restaurants, and small hotels would be sacrificed, Ms Reeves reiterated the targeted approach, stating the government was "working on additional support for those businesses" – referring specifically to pubs.
The industry welcomed the movement. Emma McClarkin, chief executive of the British Beer and Pub Association, said, "We've lost approximately 16,000 pubs since 2000... it's never been more vital for pubs to get relief in the short term." She emphasised that pubs "disproportionately pay higher rates compared to other sectors" and awaited the detail of the announcement.
