Labour's eleventh-hour reversal on business rates for pubs has been condemned as "too little, too late" by industry leaders and opposition politicians, amid dire warnings of an impending high street meltdown. The Chancellor avoided the humiliation of personally announcing her latest climbdown in the Commons, instead delegating the task to junior Treasury minister Dan Tomlinson.
Selective Support Sparks Fury
Rachel Reeves bowed to pressure following a mutiny by Labour backbenchers, unveiling a £300 million package of temporary support specifically for pubs on Tuesday evening. She declared that "pubs are different" as she announced the measures, which will see business rates bills for pubs and music venues in England reduced by 15% in 2026/27, then frozen in real terms for the following two years.
However, this targeted assistance has ignited fury across the wider retail, hospitality and leisure sectors. No immediate help was offered to thousands of other businesses facing astronomical rates increases, including restaurants, hotels, independent shops, hairdressers, florists, pharmacies, and community venues.
Industry Backlash Intensifies
Shadow Chancellor Sir Mel Stride lambasted the move as a "temporary sticking plaster" that would "only delay the pain for a few" while thousands of businesses face financial ruin. He warned that high streets nationwide are confronting a "tragedy", with industry analysis suggesting six hospitality venues could close daily this year without further intervention.
"The Government have proved today that either they do not understand the damage that they are doing or they do not care," Sir Mel declared. "Today's announcement is far too little, far too late."
Pub Ban Campaign Continues
The organiser of a campaign to ban Labour MPs from over 1,500 pubs said the restrictions would remain in place until the entire hospitality sector received assistance. Dorset landlord Andy Lennox, who masterminded the #NoLabourMP boycott, described the concessions as "welcome" but criticised the Chancellor's decision to send a junior minister to announce them.
"This shows you exactly what they think of our industry," Mr Lennox stated, warning that the climbdown would be insufficient to save a sector already battered by Labour's hikes in National Insurance and the minimum wage. He emphasised that the hospitality sector "will not be divided" and pledged solidarity with excluded businesses.
Labour MPs Join Criticism
Ominously for the Chancellor, Labour backbenchers also demanded broader support. Former minister Jim McMahon argued that ministers "could and should" have done more, urging the Treasury to make "a second attempt to get it right" with a comprehensive package for all hospitality businesses.
Fellow Labour MP Stella Creasy challenged the notion that "pubs are somehow the only cornerstone of community life", calling for additional support for small independent venues including cafés, community centres, and soft-play facilities.
Wider Sector Exclusion
Tina McKenzie of the Federation of Small Businesses welcomed the "temporary reprieve" for pubs but expressed profound disappointment for excluded businesses. "Small firms across the rest of the hospitality, leisure and retail sectors – from your local greengrocer, hairdresser and café to the nail bar or florist – will be incredibly disappointed," she said.
The scale of the looming crisis is stark. While Ms Reeves announced £4.3 billion in transitional relief at the Budget, the average pub still faced a 15% rates increase in April, rising to 48% next year and 76% in 2028. These increases result from the unwinding of Covid-era support combined with a revaluation of business premises.
Catastrophic Projections
Trade body UK Hospitality revealed that the average restaurant faces a 54% rates rise over the next three years, while the average hotel could see increases of 115%. Peter Collie, landlord of The Horseshoe Inn near London Bridge, described the 15% relief as "nowhere near enough" to save an industry in crisis, adding sarcastically that it was "better than getting a slap around the face with a wet cod."
Henry Gregg, chief executive of the National Pharmacy Association, called the exclusion of pharmacies "simply outrageous", warning that the increases would "push some pharmacies to the brink of collapse." Andrew Goodacre of the British Independent Retailers Association accused the Chancellor of announcing "a half baked U-turn while flushing independent retail round the U-bend," predicting more shop closures would result.
Budget Concessions Hinted
Treasury minister Dan Tomlinson hinted at possible further concessions in the autumn Budget, telling LBC that he wanted to "work with businesses to see what more we can do." He indicated that while tax measures specifically might not be examined, the government would be "considering them in the round" in the run-up to the Budget.
Celebrity hairdresser Richard Ward delivered a scathing assessment, accusing Labour of "squeezing business to a point where profit is becoming a dirty word." This latest U-turn marks the twelfth policy reversal during Labour's eighteen months in power, with many traced back to misjudgments by Chancellor Reeves, leaving businesses across Britain facing an uncertain and potentially devastating future.
