Chancellor Rachel Reeves is expected to reverse plans to scrap business rates relief for pubs and the hospitality sector, according to government sources. The move would extend the discount beyond April, when it was due to end entirely, in a bid to prevent widespread closures.
The U-turn follows a furious industry reaction to the November Budget, which proposed scaling back the 75% pandemic-era discount to 40% and then eliminating it. One minister told The Independent: “There’s going to be a U-turn on pubs,” while another described the original policy as “politically unsustainable” ahead of May’s local elections.
Pub landlords welcomed the news cautiously. Dawn Hopkins, who runs the Rose Inn in Norwich, said: “Getting a discount back would be a huge relief, and at this point, anything would help.” However, she warned that re-evaluations of business rates had caused “astronomical” increases in many areas. Chris Welch of the Fishnet Tavern in North Tyneside added: “It’s really positive news if this happens, but I still think more needs to be done.”
The hospitality sector has also been hit by rises in national insurance and the minimum wage. UKHospitality analysis shows the average pub faces a 15% rates rise next year, with hotels facing even steeper increases. Kate Nicholls, chair of UKHospitality, called for a “hospitality-wide solution” including a maximum 20p discount on the multiplier for all hospitality properties.
Welfare Secretary Pat McFadden hinted at changes on Radio 4’s Today programme, saying: “We understand the role that pubs play. We’ll keep talking.” The reversal would be the latest in a series of government U-turns, including on winter fuel payments, welfare cuts, and inheritance tax for farms.
