Chancellor Rachel Reeves is facing growing pressure from within her own Cabinet to offer crucial business rates support to the entire hospitality industry, not just pubs, as new analysis warns more than 2,000 venues could shut within a year.
Cabinet Pressure for a 'Whole Hospitality Solution'
The Treasury signalled a major policy reversal last week, offering targeted relief for pubs facing a steep hike in their rates bills. However, ministers and industry leaders are now urging the Chancellor to broaden this support, arguing that cafes, restaurants, hotels, music venues, theatres, and independent shops are equally vulnerable.
Kate Nicholls, Chief Executive of UK Hospitality, stated that 'a whole hospitality problem needs a whole hospitality solution.' The trade body's stark figures reveal the scale of the crisis: the average hotel will see its business rates bill surge by £28,900 in the first year alone, and by a total of £205,200 over three years. While the average pub faces an initial increase of £1,400 per year, the cumulative three-year hit is £12,900.
UK Hospitality is calling on the government to quadruple the level of business rates discount to the maximum possible for all hospitality firms. This demand has found sympathy in high places. Business Secretary Peter Kyle, who is set to discuss the issue with the Chancellor this week, hinted that support should not be restricted. He told the BBC the government had been 'in listening mode for some time' following talks with the industry in Birmingham.
A Treasury Digging In Its Heels
Despite the internal and external pressure, the Treasury is currently holding its ground. A government source insisted there are still no plans to extend the business rates help to sectors beyond pubs. The source suggested that hotels and restaurants might benefit from wider licensing reforms instead, but that the rates relief would remain 'pub specific'.
This stance is causing significant alarm. Polly Billington, MP for East Thanet and chair of Labour's coastal MPs group, confirmed that ministers are having 'genuine conversations' about support for small hospitality and retail businesses. The political fallout is already being felt, with some 1,500 pubs reportedly banning Labour MPs from their premises following the Budget.
'A Wanton Desire to Wipe Them Out'
The row over business rates is the latest blow to a sector already grappling with a cascade of rising costs. Industry figures warn that pubs and other venues are being used as a 'whipping boy' by the tax authorities.
Richard Bailey, Chairman of the Independent Family Brewers of Britain and of Daniel Thwaites brewery, launched a scathing attack, accusing the government of piling pressure on a sector battered by higher alcohol duty, minimum wages, National Insurance, VAT, corporation tax, and various green levies. 'You can only assume from the Government’s recent actions and policy decisions that there is a wanton desire to wipe them out, destroy employment and vandalise our communities,' he said.
Bailey warned that going to the pub is 'becoming increasingly unaffordable' and that locals may not even open every day due to the tax burden. He accused HM Revenue & Customs and the Treasury of being 'deaf to the voices of industry that warn of hardship, closure and cultural obliteration.'
With a Downing Street source indicating a desire to 'do it once and get it right' to avoid further debilitating U-turns, the Chancellor faces a critical decision: whether to hold a firm line or bow to the mounting pressure and offer a lifeline to the wider hospitality sector now staring down the barrel of thousands of closures.
