Andy Burnham's latest announcement of a 20% slash in business rates for nearly 32,000 pubs, clubs and live music venues across England from next April looks like a victory for British boozers on paper. However, analysis shows the cut will barely make a difference.
Small saving versus massive cost increases
Westminster boasts the cut will save a “typical” pub £1,100 per year - or around £91 per month. This does not offset the damage caused by massive tax increases imposed after two Labour budgets.
Labour hiked Employers’ National Insurance rates to 15% and dropped the payment threshold from £9,100 to £5,000 in April 2025, hammering lower-wage sectors like hospitality. Pubs, clubs and live music venues saw costs rise by thousands of pounds overnight.
Employment costs soar
UKHospitality estimated that combined employment measures (raising Employer NICs, dropping the pay threshold, and raising minimum wage) added more than £2,500 per year to the cost of employing one full-time staff member. A small pub employing eight to 10 people would see costs rise by around £37,500 per year - far exceeding the £1,100 discount.
The British Beer and Pub Association (BBPA) said 161 pubs closed in the first three months of this year across England, Scotland and Wales due to soaring costs, equating to around 2,400 job losses. Broader hospitality saw bills increase by at least £3.2 billion last year in wages alone.
Pint prices rocket
Since 2022, the average price of a pint has risen by 36%, with landlords citing rising costs of “everything that goes in it”. Across the UK, the average pint now costs around £5.34, rising to £6.55 in London, with some venues charging £8 to £10. Many have warned it will only get worse.
While extending a £2 bus fare cap provides genuine relief for daily commuters, other measures amount to piecemeal relief. Removing VAT from electricity bills in October will save households just £3.75 per month.
To preserve the Great British Pub, Westminster needs a real tax overhaul. Reversing Rachel Reeves’s Employer National Insurance threshold cut back to £9,100 would deliver immediate relief worth much more than £91 per month.
