Labour has reversed its planned changes to pub business rates following a swift backlash from the hospitality industry and a threatened rebellion by more than 30 of its own MPs. The government’s decision to revisit the valuations, which would have seen significant increases for pubs and hotels, came just weeks after the policy was announced – a far quicker reversal than previous U-turns on benefits, winter fuel payments, and inheritance tax for farmers.
The Treasury had planned to scale back Covid-era business rate discounts while simultaneously increasing the rateable value of hospitality businesses, a combination that one Labour MP said caught ministers by surprise. ‘The message of the budget was that the plan was to help pubs and smaller shops, and make people like supermarkets pay more,’ the MP said. ‘So this caught them by surprise. But they should have been able to predict it.’
Backbenchers who were poised to table an amendment to the finance bill welcomed the government’s listening mode but questioned why the Treasury had not fully considered the consequences. ‘It is now pretty obvious that most of our political mistakes have originated in the Treasury, and this is just the latest,’ one MP said, adding that the department appeared to lack ‘political nous or sense-checking’.
Another MP said the pattern of pushing through decisions without proper consultation was worrying. ‘When the government thoroughly consults ahead of producing policy, it goes really well. However, whenever it presses ahead without the engagement of people with lived experience, or backbench MPs with their finger on the pulse, it ends up in the wrong place.’ The MP urged the government to listen and engage more to avoid future U-turns.
